Avanex (AVNX) 8-K Avanex Corporation Announces Fiscal 2009

Exhibit 99.1

Avanex Corporation Announces Fiscal 2009

First Quarter Financial Results

FREMONT, Calif., November 6, 2008 — Avanex Corporation (NASDAQ: AVNX), a pioneer of intelligent photonic solutions that enable next-generation optical networks, today reported its fiscal 2009 first quarter financial results for the quarter ended September 30, 2008.

Net revenue in the first quarter of fiscal 2009 was $45.3 million, a decrease of 13 percent from $51.8 million in the fourth quarter of fiscal 2008, and a decrease of 17 percent from $54.7 million in the same period last year.

Gross margin in the first quarter of fiscal 2009 was 17%, a decrease from 31% in the fourth quarter of fiscal 2008, and a decrease from 28% in the same period last year.

Net loss in the first quarter of fiscal 2009 was $9.6 million, or ($0.63) per diluted share, compared with net income of $1.3 million, or $0.08 per diluted share in the fourth quarter of fiscal 2008. This compares to net income of $45,000 or break-even in the same period last year.

Non-GAAP net loss in the first quarter of fiscal 2009 was $5.9 million, or ($0.38) per diluted share, compared with non-GAAP net income of $1.6 million, or $0.10 per diluted share, in the fourth quarter of fiscal 2008. This compares to non-GAAP net income of $2.1 million, or $0.14 per diluted share in the same period last year.*

“The company is facing some significant challenges in light of the current macro-economic environment,” said Giovanni Barbarossa, Interim CEO of Avanex. “To better position ourselves, we moved quickly last quarter to implement a significant cost cutting plan to improve financial performance.”

Q2 FY 2009 Outlook

The company expects revenue to be between $37 million and $42 million and gross margin to be between 17 to 21 percent in the second quarter of fiscal 2009, ending December 31, 2008.

Investor Conference Call

Avanex will host a conference call to discuss fiscal 2009 first quarter results at 1:30 p.m. PST today. Investors are invited to listen to a live broadcast of the conference call via webcast, which can be accessed by visiting the Avanex Investor Relations website at http://investor.avanex.com/events.cfm. Investors can also listen to the conference call by dialing 816-581-1711 and entering access ID number 4121212.

A replay of the call will be available through an archived webcast at http://investor.avanex.com/events.cfm. An audio replay will be available through 12 AM eastern daylight time on November 13, 2008 and can be accessed by dialing 888-203-1112 (domestic) or 719-457-0820 (international) and entering access ID number 4121212.

About Avanex

Avanex Corporation is a leading global provider of Intelligent Photonic Solutions(TM) to meet the needs of fiber optic communications networks for greater capacity, longer distance transmissions, improved connectivity, higher speeds and lower costs. These solutions enable or enhance optical wavelength multiplexing, dispersion compensation, switching and routing, transmission, amplification, and include network-managed subsystems. Avanex Corporation was incorporated in 1997 and is headquartered in Fremont, California. Avanex Corporation also maintains facilities in Horseheads, New York; Shanghai, China; Villebon Sur Yvette, France; San Donato, Italy; and Bangkok, Thailand. To learn more about Avanex Corporation, visit our web site at:www.avanex.com.

Forward-looking Statements

This press release contains forward-looking statements including statements regarding expected second quarter of fiscal 2009 outlook and future operating results, competitive and market position and our strategies. Actual results could differ materially from those projected in or contemplated by the forward-looking statements. Factors that could cause actual results to differ include general economic conditions, the pace of spending in the telecommunications industry and in particular the optical networks industry, market demand and price of our products, the company’s ability to sufficiently anticipate market needs and develop products and enhancements that achieve market acceptance, unanticipated costs and expenses or the inability to identify expenses which can be eliminated, any slowdown or deferral of orders for products or the application of accounting or tax principles in an unanticipated manner.

Finally, please refer to the risk factors contained in the company’s SEC filings including the company’s Annual Report on Form 10-K filed with the SEC on Sept. 5, 2008 and subsequent filings with the SEC.

Avanex assumes no obligation and does not intend to update any forward-looking statements, whether as a result of new information, future events or otherwise.

* Non-GAAP net income (loss) and non-GAAP net income (loss) per share exclude share-based compensation expenses, gain from legal settlement, amortization of intangibles, restructuring charges (recovery), gain (loss) on disposal of property and equipment, and arbitration expenses. Details on the

items excluded from non-GAAP net income (loss) and non-GAAP net income (loss) per share are available in the table entitled, “Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income (Loss),” following the accompanying financial statements.

Contact Information:

Investor Relations

Mark Weinswig

510 897-4188

IR@Avanex.com

Avanex Corporation

CONSOLIDATED BALANCE SHEET

In thousands

(Unaudited)

	September 30, 2008			June 30, 2008
Assets
Current assets:
Cash and cash equivalents	$	13,712		$	14,839
Restricted cash		3,792			3,776
Short-term investments		32,162			40,590
Accounts receivable, net		34,068			39,032
Inventories		19,281			15,979
Due from related party		141			85
Other current assets		7,276			6,486
Total current assets		110,432			120,787
Property and equipment, net		8,994			7,688
Intangibles, net		260			314
Goodwill		9,408			9,408
Other assets		3,325			2,870
Total assets	$	132,419		$	141,067
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	33,673		$	33,255
Accrued compensation		3,887			6,272
Accrued warranty		476			626
Other accrued expenses and deferred revenue		6,110			6,003
Current portion of long-term obligations		12			13
Current portion of accrued restructuring		4,809			2,940
Total current liabilities		48,967			49,109
Contingencies (Note 12)
Long-term liabilities:
Accrued restructuring		4,260			5,043
Other long-term obligations		1,411			1,520
Total liabilities		54,638			55,672
Stockholders’ equity:
Common stock		16			15
Additional paid-in capital		786,721			784,492
Accumulated other comprehensive income		1,074			1,277
Accumulated deficit		(710,030	)		(700,389	)
Total stockholders’ equity		77,781			85,395
Total liabilities and stockholders’ equity	$	132,419		$	141,067

Avanex Corporation

CONSOLIDATED STATEMENTS OF OPERATIONS - GAAP

In thousands, except for per share data

(Unaudited)

	Three Months Ended
	September 30, 2008			June 30, 2008			September 30, 2007
Net revenue:
Third parties	$	45,213		$	51,748		$	41,395
Related parties		61			74			13,314
Total net revenue		45,274			51,822			54,709
Cost of revenue:
Cost of revenue except for purchases from related parties		37,040			35,194			39,516
Purchases from related parties		461			449			1
Total cost of revenue		37,501			35,643			39,517
Gross profit		7,773			16,179			15,192
Operating expenses:
Research and development		6,685			6,935			6,774
Sales and marketing		4,052			4,211			3,915
General and administrative		4,888			4,162			4,475
Amortization of intangibles		54			56			559
Restructuring		2,319			137			(335	)
(Gain) loss on disposal of property and equipment		—			(24	)		—
Total operating expenses		17,998			15,477			15,388
Income (loss) from operations		(10,225	)		702			(196	)
Interest and other income (expense), net		(172	)		979			515
Income (loss) before income taxes		(10,397	)		1,681			319
Income tax benefit (provision)		756			(428	)		(274	)
Net income (loss)	$	(9,641	)	$	1,253		$	45
Basic net income (loss) per common share	$	(0.63	)	$	0.08		$	0.00
Diluted net income (loss) per common share	$	(0.63	)	$	0.08		$	0.00
Weighted-average number of shares used in computing:
Basic net income (loss) per common share		15,355			15,321			15,116
Diluted net income (loss) per common share		15,355			15,330			15,389

Avanex Corporation

RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS)

In thousands, except for per share data

(Unaudited)

	Three Months Ended
	September 30, 2008			June 30, 2008			September 30, 2007
Net income (loss), GAAP	$	(9,641	)	$	1,253		$	45
Items reconciling GAAP net income (loss) to non-GAAP net income (loss):
Related to cost of revenue:
Share-based payments		284			197			331
(Gain) from legal settlement		—			(1,197	)		—
Total related to cost of sales		284			(1,000	)		331
Related to operating expenses:
Research and development—share-based payments		326			340			424
Sales and marketing—share-based payments		527			242			468
General and administrative—share-based payments		263			340			628
Amortization of intangibles		54			56			559
Restructuring		2,319			137			(335	)
(Gain) loss on disposal of property and equipment		—			(24	)		—
Arbitration expenses		—			251			—
Total related to operating expenses		3,489			1,342			1,744
Total related to net income (loss)		3,773			342			2,075
Non-GAAP net income (loss)	$	(5,868	)	$	1,595		$	2,120
Basic non-GAAP net income (loss) per common share	$	(0.38	)	$	0.10		$	0.14
Diluted non-GAAP net income (loss) per common share	$	(0.38	)	$	0.10		$	0.14
Weighted-average number of shares used in computing:
Basic non-GAAP net income (loss) per common share		15,355			15,321			15,116
Diluted non-GAAP net income (loss) per common share		15,355			15,330			15,389