Ad hoc: ADVA AG Optical Networking: ADVA OPTICAL NETWORKING REPORTS Q3 2009 FINANCIAL RESULTS ABOVE GUIDANCE

ADVA AG Optical Networking / Quarterly report / Ad hoc: ADVA OPTICAL
NETWORKING REPORTS Q3 2009 FINANCIAL RESULTS ABOVE
GUIDANCE

Ad hoc announcement according to §15 WpHG processed and transmitted
by Hugin. The issuer is solely responsible for the content of this
announcement.

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Q3 2009 revenues at EUR 58.1 million

Q3 2009 IFRS pro forma operating income of
EUR 2.0 million (3.4% of revenues)

Q4 2009 revenues expected to range
between EUR 54 million and EUR 59 million with
IFRS pro forma operating income between -1% and +4% of revenues

Norcross, Georgia, USA and Martinsried/Munich, Germany. October 29,
2009. ADVA Optical Networking announced Q3 2009 financial results for
the quarter ended September 30, 2009, and prepared in accordance with
International Financial Reporting Standards (IFRS).

Q3 2009 IFRS FINANCIAL RESULTS
Revenues in Q3 2009 at EUR 58.1 million were higher than guidance of
between EUR 52 million and EUR 57 million, up 7.4% vs. Q3 2008 at
EUR 54.1 million, and sequentially flattish vs. EUR 58.2 million
reported in Q2 2009. IFRS pro forma operating income, excluding
stock-based compensation and amortization & impairment of goodwill &
acquisition-related intangible assets, amounted to EUR 2.0 million or
3.4% of revenues in Q3 2009, slightly above guidance of between -2%
and +3% of revenues. This compares to Q3 2008 IFRS pro forma
operating income of EUR 1.3 million or 2.4% of revenues, and to IFRS
pro forma operating income of EUR 1.1 million or 1.9% of revenues in
Q2 2009. Year-on-year, the pro forma operating income improvement is
largely due to higher revenues and lower general & administrative and
development expenses.

The IFRS operating income in Q3 2009 was EUR 1.0 million, after an
operating loss of EUR 0.1 million in Q3 2008. The key drivers for
this improvement are the above-mentioned increase of pro forma
operating income as well as reduced stock compensation expense of
EUR 0.4 million after EUR 0.8 million in Q3 2008.

The IFRS net income in Q3 2009 was nil, after positive EUR 0.4
million in Q3 2008. Beyond the factors impacting the operating
result, Q3 2009 net foreign currency exchange losses of EUR 0.9
million after gains of EUR 0.5 million in Q3 2008 contributed to the
decrease in net profit. Basic and diluted IFRS net earnings per share
were nil each in Q3 2009 after EUR 0.01 each in Q3 2008.

"Once again, we are very pleased with our Q3 2009 revenues of
EUR 58.1 million, which exceed guidance and demonstrate a sound 7.4%
year-on-year growth, reflecting the strong long-term growth trend in
our market and our ability to execute in challenging times. Our pro
forma gross margin increased from 41.3% in Q2 2009 to 41.8% in
Q3 2009, related to the typical quarterly variability of our customer
and product mix. In line with the strong revenue development, pro
forma operating income in Q3 2009 at EUR 2.0 million or 3.4% of
revenues is above guidance of between -2% and +3% of revenues.
Further, cash and cash equivalents were at EUR 48.0 million at the
end of Q3 2009. The cash balance was adversely impacted by the early
redemption of a EUR 3.0 million loan originally scheduled to be
repaid in December 2009. Excluding this effect, cash and cash
equivalents would have reached an all-time high of EUR 51.0 million
at quarter-end. This strong development is driven by further working
capital improvements and also results in a net liquidity improvement
to EUR 19.1 million, up EUR 1.6 million or 9% vs. the end of the
previous quarter and up a very strong EUR 13.7 million or 254% vs.
the end of Q3 2008. This represents the fifth consecutive quarterly
all-time high and demonstrates our commitment to managing our cash
flows and balance sheet," commented Jaswir Singh, chief financial
officer and chief operating officer of ADVA Optical Networking.

CONFERENCE CALL AND WEBCAST
In conjunction with the release of its Q3 2009 IFRS financial results
on October 29, 2009, ADVA Optical Networking will host a conference
call for analysts and investors at 3:00 p.m. CET/10:00 a.m. EDT.
Participating in the call will be ADVA Optical Networking's chief
executive officer, Brian Protiva, and chief financial officer & chief
operating officer, Jaswir Singh. Interested parties may dial in at
+49 69 40359 611 or +1 866 306 3455, and listen live via webcast on
ADVA Optical Networking's website, located on the 'financial results'
page in the investor relations section at www.advaoptical.com.

Q4 2009 OUTLOOK
Looking ahead, amidst the differing opinions of business optimism
about a recovery and the caution around a double-dip economic
recession, revenue visibility continues to be weak. ADVA Optical
Networking expects Q4 2009 revenues to range between EUR 54 million
and EUR 59 million, and we anticipate pro forma operating income of
between -1% and +4% of revenues. Further, ADVA Optical Networking
notes that it will continue to perform detailed quarterly reviews of
the expected business development in respect to all intangible
assets, including capitalized research and development expenses.
These reviews may result in non-cash impairment charges in Q4 2009
and beyond. The pro forma operating income guidance provided above
excludes any such potential impairment charges. ADVA Optical
Networking will publish its Q4 and full-year 2009 financial results
on March 3, 2010.

"In the middle of one of the most turbulent macroeconomic
environments in history, ADVA Optical Networking continues to do well
by executing on its strategy and meeting and exceeding its guidance
over several quarters. We continue to be a strong and trusted partner
to both carriers and enterprises. As ADVA Optical Networking
capitalizes on new technologies, we remain committed to our customers
by ensuring fast delivery of our products and solutions, thereby
driving long-term growth and sustainability. We are leveraging our
leading innovations to quickly enhance networking performance in the
globally expanding enterprise and carrier segments. We do so through
the continual development of a rich and diverse talent-pool," stated
Brian Protiva, chief executive officer of ADVA Optical Networking.
NINE-MONTH IFRS CONSOLIDATED INCOME STATEMENT

(in thousands of EUR, Q3 Q3 9M 9M
except earnings per share) 2009 2008 2009 2008

Revenues 58,112 54,116 173,208 160,823
Pro forma cost of goods sold -33,815 -30,501 -100,301 -93,056
Pro forma gross profit 24,297 23,615 72,907 67,767
Pro forma selling and marketing
expenses -8,784 -8,492 -27,335 -24,930
Pro forma
general and administrative expenses -5,524 -6,650 -17,251 -19,552
Pro forma
research and development expenses -9,401 -9,737 -30,265 -30,672
Income from capitalization of
development
expenses, net of amortization for
capitalized
development projects 1,256 2,063 4,223 7,503
Restructuring expenses 0 0 0 -2,251
Other operating income (expenses),
net 127 511 719 1,348
Pro forma operating income 1,971 1,310 2,998 -787
Amortization of
intangible assets from acquisitions -603 -632 -1,852 -3,827
Stock compensation expenses -372 -761 -950 -1,882
Operating income (loss) 996 -83 196 -6,496
Interest income (expense), net -325 -330 -914 -743
Other income (expense), net -915 526 -299 -932
Income (loss) before tax -244 113 -1,017 -8,171
Income tax benefit (expense), net 244 256 928 1,473
Net income (loss) 0 369 -89 -6,698

Earnings per share in EUR
Basic 0.00 0.01 0.00 -0.15
Diluted 0.00 0.01 0.00 -0.15

# # #

ABOUT ADVA OPTICAL NETWORKING
ADVA Optical Networking (FSE: ADV) is a global provider of
telecommunications equipment. With innovative Optical+Ethernet
transport solutions, we build the foundation for high-speed,
next-generation networks. Our FSP product family adds scalability and
intelligence to our customers' networks while removing complexity and
cost. With a flexible and fast-moving organization, we forge close
partnerships with our customers to meet growing demand for data,
storage, voice and video services. Thanks to reliable performance for
more than 15 years, we have become a trusted partner for more than
200 carriers and 10,000 enterprises across the globe. For more
information, please visit us at www.advaoptical.com.

The economic projections and forward-looking statements contained in
this document relate to future facts. Such projections and
forward-looking statements are subject to risks which cannot be
foreseen and which are beyond the control of ADVA Optical Networking.
ADVA Optical Networking is therefore not in a position to make any
representation as to the accuracy of economic projections and
forward-looking statements or their impact on the financial situation
of ADVA Optical Networking or the market in the shares of ADVA
Optical Networking.

ADVA Optical Networking provides consolidated pro forma financial
results in this press release solely as supplemental financial
information to help investors and the financial community make
meaningful comparisons of ADVA Optical Networking's operating results
from one financial period to another. ADVA Optical Networking
believes that these pro forma consolidated financial results are
helpful because they exclude non-cash charges related to the stock
option programs and amortization and impairment of goodwill and
acquisition-related intangible assets, which are not reflective of
the company's operating results for the period presented. This pro
forma information is not prepared in accordance with IFRS and should
not be considered a substitute for historical information presented
in accordance with IFRS.

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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