ADVA Optical Networking posts "most challenging quarter ever "
Q3 revenues of €111.2 million down 22.9 percent from Q2 2017
ADVA Optical Networking has announced financial results for third quarter ended on September 30, 2017. Quarterly revenues decreased to €111.2 million from €144.2 in Q2 2017. This marks a decrease of 30.3 percent year-on-year (YoY) (Q3 2016: €159.5 million) and is within the adjusted guidance announced on August 28, 2017.
"Q3, 2017 was one of the most challenging quarters in our company's history," commented Brian Protiva, CEO. "We had to lower our guidance within a financial quarterly period for the first time since Q2, 2008. Nevertheless, the integration of MRV Communications is progressing very well. We have implemented much of the planned restructuring measures, updated our roadmaps and aligned our product portfolios, development teams and sales focus. All this provides us with a solid basis for a return to growth and profitability in 2018."
"The drop in revenues from two major customers during the acquisition process of MRV was a hard hit," commented Uli Dopfer, CFO of ADVA Optical Networking. "However, we responded immediately and adjusted our cost structure to the current sales level without jeopardising any activities that are important for our future. By adding Scott St. John to our Management Board, we further strengthen our sales expertise and are convinced that our strategy, our innovation and our focus on interesting customers and growth markets are a solid basis for delivering long-term, sustainable growth."
Pro forma operating income in Q3 2017 stood at €-0.8 million or -0.7 percent of revenues, down from €9.2 million or 6.4 percent of revenues in Q2 2017. This number is also within the adjusted guidance.
The integration of MRV Communications (a US networking company acquired in August 2017) and the related restructuring measures, as well as the consolidation of the product portfolios, resulted in one-time restructuring costs of €8.4 million. These costs are not included in the pro forma operating income. The operating loss amounted to €11.5 million (Q3 2016: operating income of €7.2 million). Cash and cash equivalents totaled €57.2 million. Net liquidity decreased to €-44.1 million and net working capital amounted to €136.2 million.
Q4 2017 Outlook
In Q4 2017, ADVA Optical Networking expects revenues to range between €115 million and €130 million and anticipates a pro forma operating income of between 0 percent and 5 percen .
