Ad hoc: ADVA AG Optical Networking: ADVA OPTICAL NETWORKING REPORTS Q3 2008 FINANCIAL RESULTS IN LINE WITH EXPECTATIONS

ADVA AG Optical Networking / Quarterly report / Ad hoc: ADVA OPTICAL
NETWORKING REPORTS Q3 2008 FINANCIAL RESULTS IN LINE
WITH EXPECTATIONS

Ad hoc announcement according to §15 WpHG processed and transmitted
by Hugin. The issuer is solely responsible for the content of this
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ADVA OPTICAL NETWORKING REPORTS
Q3 2008 FINANCIAL RESULTS
IN LINE WITH EXPECTATIONS

Q3 2008 revenues at EUR 54.1 million

Q3 2008 IFRS pro forma operating income of
EUR 1.3 million (2.4% of revenues)

Q4 2008 revenues expected to range
between EUR 50 million and EUR 55 million with
IFRS pro forma operating income between -3% and +2% of revenues

Norcross, Georgia, USA and Martinsried/Munich, Germany. November 6,
2008. ADVA Optical Networking today announced Q3 2008 financial
results for the quarter ended September 30, 2008, and prepared in
accordance with International Financial Reporting Standards (IFRS).

Q3 2008 IFRS FINANCIAL RESULTS
Revenues in Q3 2008 totaled EUR 54.1 million after EUR 61.5 million
in Q3 2007 and EUR 52.7 million in Q2 2008, and in line with guidance
of between EUR 50 million and EUR 58 million. IFRS pro forma
operating income, excluding stock-based compensation and amortization
& impairment of goodwill & acquisition-related intangible assets,
came in at EUR 1.3 million in Q3 2008 or 2.4% of revenues, also in
line with guidance of between -4% and +4%. This compares to Q3 2007
IFRS pro forma operating income of EUR 4.0 million or 6.5% of
revenues, and to Q2 2008 IFRS pro forma operating income of EUR -0.1
million or -0.1% of revenues. The year-over-year pro forma operating
income reduction to the largest extent was driven by weaker revenues.

The IFRS operating loss in Q3 2008 was EUR 0.1 million, after an
operating income of EUR 1.3 million in Q3 2007. The key driver for
this development is the above-mentioned decline of pro forma
operating income. In part, the decline is offset by lower scheduled
amortization of intangible assets from acquisitions, which amounted
to EUR 0.6 million in Q3 2008 after EUR 2.0 million in Q3 2007.

IFRS net income in Q3 2008 amounted to EUR 0.4 million, after a net
loss of EUR 1.2 million in Q3 2007. The Q3 2008 net income was
largely driven by the factors impacting the operating result
described above, by net foreign currency exchange gains of EUR 0.5
million and by an income tax benefit of EUR 0.3 million. The net
foreign currency exchange gains were largely due to the devaluation
of the EUR against the USD, and the income tax benefit related to
deferred tax adjustments on tax losses carried forward and temporary
differences between tax and IFRS accounting. In Q3 2007, in contrast,
there were net foreign currency exchange gains of EUR 1.3 million and
an income tax expense of EUR 1.0 million. Basic and diluted IFRS net
earnings per share were EUR 0.01 each in Q3 2008 after EUR -0.03 each
in Q3 2007.

CONFERENCE CALL AND WEBCAST
In conjunction with the release of its Q3 2008 IFRS financial results
today, November 6, 2008, ADVA Optical Networking will host a
conference call for analysts and investors at
3:00 p.m. CET/9:00 a.m. EST. Participating in the call will be ADVA
Optical Networking's chief executive officer, Brian Protiva, and
chief financial officer, Jaswir Singh. Interested parties may dial in
at +49 69 4035 9616 (no dial-in code) or +1 800 814 6417 (participant
code: 572371#), and listen live via webcast on ADVA Optical
Networking's website, located on the 'financial results' page in the
investor relations section of ADVA Optical Networking's website at
www.advaoptical.com.

Q4 2008 OUTLOOK
Based on the volatile macro environment, ADVA Optical Networking
expects Q4 2008 revenues to range between EUR 50 million and EUR 55
million. Further, we anticipate pro forma operating income of between
-3% and +2% of revenues in Q4 2008. Further, ADVA Optical Networking
notes that like in prior years, as part of the IFRS year-end 2008
closing process, it will perform a detailed review of the expected
business development in respect of all intangible assets, including
capitalized research and development expenses. This review may result
in non-cash impairment charges in Q4 2008. The pro forma operating
income guidance provided above excludes any such potential impairment
charges. ADVA Optical Networking will publish its Q4 and
full-year 2008 financial results on March 10, 2009.

NINE-MONTH IFRS CONSOLIDATED INCOME STATEMENT

(in thousands of EUR, Q3 Q3 9M 9M
except earnings per share) 2008 2007 2008 2007

Revenues 54,116 61,460 160,823 197,674
Pro forma cost of goods sold -30,501 -34,468 -93,056 -115,026
Pro forma gross profit 23,615 26,992 67,767 82,648
Pro forma selling and marketing
expenses -8,492 -7,510 -24,930 -24,087
Pro forma
general and administrative expenses -6,650 -6,531 -19,552 -18,966
Pro forma
research and development expenses -9,737 -10,743 -30,672 -30,607
Income from capitalization of
development expenses, net of
amortization for capitalized
development projects 2,063 1,735 7,503 4,404
Restructuring expenses 0 0 -2,251 0
Other operating income (expenses),
net 511 69 1,348 515
Pro forma operating income 1,310 4,012 -787 13,907
Amortization of
intangible assets from acquisitions -632 -1,992 -3,827 -6,870
Stock compensation expenses -761 -735 -1,882 -2,528
Operating income (loss) -83 1,285 -6,496 4,509
Interest income (expense), net -330 -210 -743 -661
Other income (expense), net 526 -1,294 -932 -1,877
Income (loss) before tax 113 -219 -8,171 1,971
Income tax benefit (expense), net 256 -968 1,473 -3,719
Net income (loss) 369 -1,187 -6,698 -1,748

Earnings per share in EUR
basic 0.01 -0.03 -0.15 -0.04
diluted 0.01 -0.03 -0.15 -0.04

# # #

PUBLISHED BY:
ADVA AG Optical Networking, Martinsried/Munich and Meiningen, Germany
ADVA Optical Networking North America, Inc., Norcross, Georgia, USA
ADVA Optical Networking (Shenzhen) Ltd., Shenzhen, China
www.advaoptical.com

FOR PRESS:
Christine Keck
t +1 201 258 8293 (U.S.)
t +44 1904 699 358 (Europe)
t +86 755 8621 7400 (Asia)
public-relations@advaoptical.com

FOR INVESTORS:
Wolfgang Guessgen
t +1 201 258 8302 (U.S.)
t +49 89 89 0665 940 (Europe)
t +86 755 8621 7400 (Asia)
investor-relations@advaoptical.com

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ADVA AG Optical Networking
Campus Martinsried, Fraunhoferstr. 9a
Martinsried/Munich Germany

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