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ots Ad hoc-Service: ADVA AG
1999 Sales up 106%, Operating Income up 201%, Net Profit up 316%
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Martinsried/Munich, Germany; Ramsey, New Jersey (ots Ad hoc-Service) - ADVA Optical Networking (Neuer Markt: ADV), a leading global provider of optical networking solutions, today announced record sales and earnings results for the fourth quarter and the full- year 1999 (ended December 31, 1999). ADVA also expects significant increases in sales in 2000 based on today's projections, as the strong momentum in optical networking will continue.
Sales for the full-year 1999 reached to 23.6 million Euro ($22.9 million USD), an increase of 106% over the same period of the prior year (1998: 11.4 million Euro / $11.1 million USD). Operating income according to U.S. GAAP totaled 1.9 million Euro ($1.9 million USD), an increase of 201% over the same period of the prior year (1998: 0.6 million Euro / $0.6 million USD). Net income according to U.S. GAAP totaled 2.2 million Euro ($2.1 million USD), an increase of 316% over the same period of the prior year (Q4 1998: 0.5 million Euro / $0.5 million USD). Earnings per share on a diluted basis were 0.42 Euro ($0.41 USD) for the full-year 1999 compared with 0.10 Euro ($0.10 USD) for the full-year 1998.
Sales in the fourth quarter of 1999 reached 8.4 million Euro ($8.2 million USD), an increase of 155% over the same period of the prior year (Q4 1998: 3.3 million Euro / $3.2 million USD). Operating income according to U.S. GAAP totaled 1.1 million Euro ($1.1 million USD) (Q4 1998: 0.0 million Euro / $0.0 million USD). Net income according to U.S. GAAP totaled 1.2 million Euro ($1.2 million USD) (Q4 1998: 0.2 million Euro / $0.2 million USD). Earnings per share on a diluted basis were 0.24 Euro ($0.23 USD) in the fourth quarter of 1999 compared with 0 Euro ($0 USD) in the fourth quarter of 1998.
ADVA's consistently solid sales growth during 1999 was primarily attributable to the successful introduction of its Fiber Service Platform (FSP) -I and -II, which were launched in February and September of 1999. The FSP-I and FSP-II accounted for a total of 44% of sales during 1999 and were sold to both enterprise customers and telecommunication carriers. Remaining sales were comprised of Optical Channel Multiplexer (OCM) products, an earlier product generation sold entirely to enterprise customers.
Sales throughout all geographic regions exhibited strong performance during 1999, with Europe comprising 62% of total sales, the Americas 31% and Asia-Pacific 7%. During 1999, ADVA expanded its customer base to 197 end-user customers, including 12 telecommunication carriers. The ADVA team worldwide continued to grow, reaching 132 as of December 31, 1999. As of March 1, 2000, the team totaled 144.
Andreas G. Rutsch, ADVA's Chief Financial Officer, said, "We are extremely pleased to report the most successful year of sales growth and profitable operations to our shareholders and the financial community. These results are confirmation of our high- growth model and winning strategy, and the management team joins me in thanking and congratulating our outstanding ADVA team. We continue to be excited about the phenomenal growth opportunities in the optical networking market and are confident that we can continue to deliver this type of solid performance."
2000 Financial Forecasts ADVA Optical Networking reports that its forecasted organic sales are expected to grow at a rate of approximately 100% for 2000 and 2001, anticipated to reach ca. 50 million Euro ($48 million USD) in 2000 and 102 million Euro ($99 million USD) in 2001. Operating income is expected to be ca. 10% of sales in 2000 and 12% of sales in 2001, based on today's projections.
On February 28, 2000, ADVA announced the acquisition of Storage Area Networks, Ltd., a leading UK-based provider of storage area network routing solutions, and Cellware GmbH, a leading Berlin- based provider of integrated access devices. These acquisitions are subject to closing conditions and are anticipated to close during the second quarter of 2000. Assuming that ADVA will successfully close both transactions, the full financial results of both acquisitions will be consolidated together with ADVA's starting in the second quarter of 2000. These consolidated results will be retroactive to reflect all activities since January 1, 2000. SAN's sales are anticipated to reach ca. 5 million Euro ($5 million USD) in 2000 and 11 million Euro ($11 million USD) in 2001, and operating income will be -28% of sales in 2000 and 2% of sales in 2001. Cellware's sales are anticipated to reach ca. 5 million Euro ($5 million USD) in 2000 and 11 million Euro ($11 million USD) in 2001, and operating income will be ca. -74% of sales in 2000 and 2% of sales in 2001.
Pro-forma consolidated ADVA sales are expected to reach ca. 62 million Euro ($60 million USD) in 2000 and 124 million Euro ($120 million USD) in 2001. ADVA will incur goodwill costs of approximately 1.5 million Euro ($1.5 million USD) annually over the next 15 years for the acquisition of Cellware. Operating income prior to goodwill is anticipated to be ca. 0% in 2000, and operating income after goodwill is anticipated ca. -2% in 2000. Operating income prior to goodwill is expected to be ca. 10% in 2001, and operating income after goodwill is expected to be ca. 9% in 2001. A majority of operating expenses will be invested into research and development; SAN's next product will be ready for general availability during mid-2000 and Cellware's next product generation will be ready for general availability during the first half of 2001.
Andreas G. Rutsch said, "We have committed to making a significant investment in R&D in ADVA, Cellware and SAN in order to quickly bring new technologies and products to market and expand our leading market position in the enterprise and metro access space. It is ADVA's firm belief that the first to market in a rapidly growing environment captures the most market share, thus increasing shareholder value."
Stock Split ADVA Optical Networking also announced a split of the company's common stock on a five-for-one basis, contingent upon shareholder approval at the annual shareholders' meeting on May 24, 2000. Following shareholder approval, the split will be executed on the Neuer Markt stock exchange after the necessary adjustment in ADVA's commercial register in late May.
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