ADVA boosts operating income

Fiber Optics Weekly Update, March 21, 2003

ADVA Optical Networking, a global provider of optical networking solutions, announced fourth quarter and full-year 2002 audited financial results for the period ended December 31, 2002, and prepared in accordance with U.S. General Accepted Accounting Principles (U.S. GAAP).

FOURTH QUARTER 2002 FINANCIAL RESULTS

Revenues in the fourth quarter 2002 totaled EUR 22.2 million, compared to revenues of EUR 22.0 million in the third quarter 2002, and revenues of EUR 24.2 million in the fourth quarter 2001. Pro forma operating income increased to EUR 2.3 million in the fourth quarter 2002, a sequential increase of 45.0 percent compared to pro forma operating income of EUR 1.6 million in the third quarter 2002, and significant improvement over a pro forma operating loss of EUR 0.2 million in the fourth quarter 2001.

Pro forma net income from continuing operations increased to EUR 5.2 million in the fourth quarter 2002, compared to pro forma net income from continuing operations of EUR 1.2 million in the third quarter 2002 and EUR 2.0 million in the fourth quarter 2001. ADVA posted actual net income of EUR 4.0 million in the fourth quarter 2002, compared to an actual net loss of EUR 11.7 million in the fourth quarter 2001. The higher net loss in 2001 particularly resulted from discontinuing operations at the company's site in Cambridge, UK, and recording a one-time non-cash impairment loss from two acquisitions. Actual basic net earnings per share totaled EUR 0.12 in the fourth quarter 2002 and EUR -0.35 in the fourth quarter 2001. ADVA has included charges for stock option compensation in its actual financial results since the company first issued options in 1999.

FULL-YEAR 2002 FINANCIAL RESULTS

Revenues in 2002 remained at a relatively similar level to 2001, totaling EUR 88.1 million compared to EUR 90.0 million. Pro forma operating income increased to EUR 4.2 million in 2002, a significant improvement over a pro forma operating loss of EUR 5.6 million in 2001. Pro forma net income from continuing operations increased to EUR 6.1 million in 2002, compared to pro forma net loss from continuing operations of EUR 4.1 million in 2001. ADVA posted an actual net loss of EUR 1.3 million during the full-year 2002, compared to EUR 116.4 million during the full-year 2001. Actual basic net earnings per share totaled EUR -0.04 in 2002 and EUR -3.57 in 2001.