ADVA announces stable revenues, improved income in Q1 2003

7 May 2003 Martinsried/Munich, Lightwave Europe--ADVA Optical Networking, a provider of optical networking solutions, has announced its Q1 2003 reviewed financial results.

Revenues in Q1 2003 totalled EUR21.3 million compared to revenues of EUR21.6 million in Q1 2002. Pro forma operating income increased to EUR2.2 million in Q1 2003, a significant improvement over EUR0.1 million in Q1 2002.

Pro forma net income from continuing operations increased to EUR 1.8 million in Q1 2003, compared to a pro forma net loss from continuing operations of EUR 0.1 million in Q1 2002.

Andreas G. Rutsch, ADVA's CFO commented, "2002 was a highly successful year for ADVA of growing market share, stabilizing revenues, and increasing profitability in a continued weak environment.

"We began 2003 from a strong starting position and remained steady on course, delivering an eighth consecutive quarter of stable revenues with pro forma operating and net income margins of 10.2% and 8.4%, respectively."

ADVA posted actual net income of EUR 0.6 million in Q1 2003, compared to an actual net loss of EUR 1.5 million in Q1 2002. Basic and diluted net earnings per share totalled EUR 0.02 in the first quarter 2003 and EUR -0.04 in the first quarter 2002. ADVA has included charges for stock option compensation in its actual financial results since the company first issued options in 1999.

Brian L Protiva, CEO, said, "We remain convinced that metro optical networking provides compelling advantages for carriers and enterprises to expand their cost-savings and value-added applications. Our customer base continues to grow every quarter, even though the general market conditions have remained relatively weak.

"Our platforms have a strong value proposition of delivering fifty times the amount of bandwidth for the same price as a traditional T1/T3 or E1/E3 service. This kind of economics fundamentally changes the way a carrier or enterprise designs a metro network and can distribute storage, Ethernet, and wavelength services."

Q1 2003 highlights
- ADVA won one new carrier end customer, a U.S.-based local exchange carrier. Pan-European carrier LambdaNet Communications deployed ADVA's FSP 2000 and 3000 in five German cities. Existing carrier customer Kingston Communications expanded deployments to include both FSP 500 and 2000. Existing carrier customer British Telecom launched a fifth service with ADVA's products, the 2.5 Gigabit Wavestream Connect.

- The company introduced several new features for the FSP platforms in the first quarter 2003, targeted at enhancing product performance and reducing costs. A new CWDM module, 2.5Gbit/s service card, and Single Fiber Working solution were released for the FSP 500. A new CWDM hybrid solution was launched for the FSP 2000, allowing upgrades to a full 8-channel CWDM or 20-channel hybrid CWDM/DWDM system. The newly-introduced Slimline chassis version of ADVA's FSP 3000 provides a high-speed feeder solution for transporting a limited number of high-bandwidth applications to metro network infrastructure.

- ADVA's FSP systems completed interoperability testing in an IBM Peer-to-Peer Remote Copy environment, and were qualified for 2:1 Time Division Multiplexing and 2 Gigabit Fibre Channel with INRANGE's IN-VSN FC/9000 Fibre Channel Directors.

- ADVA's shares were admitted for trading on the new Prime Standard segment of the Frankfurt Stock Exchange in January 2003.