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Aastra Reports First Quarter Financial Results

(April 18, 2012)

TORONTO, ONTARIO -- (Marketwire) -- 04/18/12 -- Aastra Technologies Limited - (TSX:AAH) today reported its unaudited financial results for the first quarter ended March 31, 2012.

Revenue for the three months ended March 31, 2012 was $147.3 million compared to $162.7 million for the same quarter in 2011, a decrease of approximately 9.5%. Excluding the impact of foreign exchange, revenue dropped approximately 8.1% from the same period last year. Revenue decreases were experienced across most geographical markets including Western Europe where the majority of the Company's revenue is generated.

Gross margin increased to 43.4% of revenue in the first quarter of 2012 compared to 42.5% of revenue in the same period in 2011 due to the higher margin earned on software applications and service sales. The Company continues to experience an increase in revenue from software applications and service as a percentage of total revenue and this had a positive impact on gross margins realized during the first quarter of 2012.

Research and development expenses in the first quarter of 2012 were $14.9 million or 10.1% of revenue, compared to $17.4 million or 10.7% of revenue in the same quarter of 2011. Selling, general and administrative ("SG&A") expenses were $42.9 million or 29.1% of revenue in the first quarter of 2012 compared to $44.7 million or 27.5% of revenue in the first quarter of 2011. Operating expenses continued to decrease during the first quarter as a result of continued cost control and efficiencies across most markets.


Foreign exchange losses of $0.7 million were recognized in the first quarter of 2012 mainly as a result of a continued weakness in the Euro. Amortization expense recorded in operating expenses decreased to $4.3 million in the first quarter of 2012 compared to $5.5 million in the first quarter of 2011 as certain intangible assets acquired in previous years have become fully amortized.

The Company recorded net finance income of $1.2 million in the first quarter of 2012 compared to $0.6 million in the same period in 2011. Income tax expense of $0.4 million or 16.9% of pre-tax profit compared to 19.7% of pre-tax profit in the first quarter last year.

As a result of the above, profit increased in the first quarter this year to $2.0 million or $0.14 diluted earnings per share compared to $0.2 million or $0.01 diluted earnings per share in the same period in 2011.

Cash and short-term investments totaled $158.2 million at the end of March 2012 compared to $134.1 million at December 31, 2011. During the first quarter of 2012, the Company generated $28.7 million of cash flow in operations. Accounts receivables decreased by $18.0 million as a result of the seasonally weaker sales value. In addition, inventory decreased by an additional $3.6 million and finance lease receivables decreased by $2.6 million. The Company also returned $2.8 million in dividends to shareholders during the first quarter.

As previously announced, subsequent to the close of the first quarter, the Company has completed a substantial issuer bid ("SIB") wherein it repurchased approximately 2.2 million of its own common shares at $23.00 per share for a total cost of $50 million. The SIB was funded from existing cash balances.

Finally, the Company is also pleased to announce that it will pay a dividend to its shareholders of $0.20 per share for this quarter, payable on May 24, 2012 to all shareholders of record on May 3, 2012. The dividend declared today has been designated as an "eligible" dividend for the purposes of the Income Tax Act (Canada) and similar provincial legislation. Shareholders of Aastra are entitled to receive dividends only if and when such dividends have been declared and there is no entitlement to any dividends prior to any declaration thereof by Aastra's Board of Directors.

About Aastra Technologies Limited

Aastra Technologies Limited (TSX:AAH) is a global company at the forefront of the Enterprise Communication market. Headquartered in Concord, Ontario, Canada, Aastra develops and delivers innovative and integrated solutions that address the communication needs of businesses small and large around the world. Aastra enables Enterprises to communicate and collaborate more efficiently and effectively by offering customers a full range of open standard IP-based and traditional communications solutions, including terminals, systems, and applications. For additional information on Aastra, visit our website at http://www.aastra.com.

Certain statements made herein may be forward-looking statements within the meaning of applicable Canadian securities legislation. These forward-looking statements include, among others, statements with respect to our Board of Directors declaring any future quarterly dividends and, if so declared, the amount of such dividends. By their very nature, forward-looking statements involve numerous factors and assumptions, and are subject to inherent risks and uncertainties, both general and specific, which give rise to the possibility that such forward-looking statements will not be achieved.

Shareholders are entitled to receive dividends only if and when such dividends have been declared and there is no entitlement to any dividends prior to any declaration thereof by our Board of Directors. The material factors that will be considered by our Board of Directors in determining whether it is appropriate to declare any future dividends, and the amount of any such dividends, include: our earnings, cash flow, quarterly fluctuations in financial results and financing requirements to fund acquisitions or other business opportunities. Please refer to our filings on the website maintained by the Canadian Securities Administrators at www.sedar.com, including our Annual Information Form and our annual and quarterly Management Discussion and Analyses for other material factors that may be considered by our Board of Directors in determining whether to declare any future dividends and the amount of any such dividends.

We caution readers not to place undue reliance on these forward-looking statements as our actual results may differ materially from our expectations if known and unknown risks or uncertainties affect our business, or if our estimates or assumptions prove inaccurate. Therefore, we cannot provide any assurance that forward-looking statements will materialize. Unless otherwise required pursuant to applicable Canadian securities legislation, we assume no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or any other reason.

---------------------------------------------------------------------------- ---------------------------------------------------------------------------- AASTRA TECHNOLOGIES LIMITED CONSOLIDATED STATEMENTS OF PROFIT (UNAUDITED) Stated in thousands of Canadian dollars, except per share amounts 1st QUARTER Three months ended March 31st 2012 2011 ---------------------------------------------------------------------------- Revenue $ 147,270 $ 162,706 Cost of sales 83,329 93,606 ---------------------------------------------------------------------------- 63,941 69,100 Expenses: Selling, general and administrative 42,928 44,728 Research and development 14,884 17,399 Depreciation and amortization 4,283 5,508 Foreign exchange loss 732 1,882 ---------------------------------------------------------------------------- Results from operating activities 1,114 (417) Finance income (1,293) (818) Finance expense 46 172 ---------------------------------------------------------------------------- Profit before income taxes 2,361 229 Income taxes 398 45 ---------------------------------------------------------------------------- Profit for the period $ 1,963 $ 184 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Earnings per share: Basic $ 0.14 $ 0.01 Diluted $ 0.14 $ 0.01 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (i) Actual common shares outstanding as at March 31, 2012 - 14,033,985 (2011 - 14,074,385) (ii) Weighted average common shares outstanding for the three months ended March 31, 2012 - 14,032,735 (2011 - 14,064,385) (iii) Weighted average fully diluted common shares outstanding for the three months ended March 31, 2012 - 14,129,855 (2011 - 14,139,683) ---------------------------------------------------------------------------- ----------------------------------------------------------------------------

The interim consolidated financial statements for the three months ended March 31, 2012 and 2011 have not been reviewed by an auditor.

---------------------------------------------------------------------------- ---------------------------------------------------------------------------- AASTRA TECHNOLOGIES LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Stated in thousands of Canadian dollars 1st QUARTER Three months ended March 31st 2012 2011 ---------------------------------------------------------------------------- Cash and cash equivalents provided by (used in): Operating activities: Profit for the period $ 1,963 $ 184 Depreciation of property, plant and equipment 2,477 2,873 Amortization of intangible assets 2,693 3,639 Share-based compensation expense 338 457 Loss on sale of property, plant and equipment 265 - Finance income (1,293) (818) Finance expense 46 172 Income tax expense 398 45 Change in non-cash pension liabilities (30) 629 Change in non-cash operating working capital 22,089 (12,379) Income taxes paid (237) (4,291) ---------------------------------------------------------------------------- 28,709 (9,489) ---------------------------------------------------------------------------- Investing activities: Interest received 856 718 Proceeds from disposal of property, plant and equipment 7 - Purchase of property, plant and equipment (825) (583) Purchase of intangible assets (139) (20) Business acquisition, net of cash acquired (2,675) - ---------------------------------------------------------------------------- (2,776) 115 ---------------------------------------------------------------------------- Financing activities: Dividends paid to shareholders (2,806) (2,814) Proceeds from exercise of share options 38 251 Receipt of acquired lease receivables 120 187 Payment of acquired loan payable (120) (187) Repayment of loans payable (37) (74) Finance costs paid (34) (162) ---------------------------------------------------------------------------- (2,839) (2,799) ---------------------------------------------------------------------------- Foreign exchange on cash held in foreign currency 1,074 567 ---------------------------------------------------------------------------- Increase (decrease) in cash and cash equivalents 24,168 (11,606) Cash and cash equivalents, beginning of period 129,933 90,704 ---------------------------------------------------------------------------- Cash and cash equivalents, end of period $ 154,101 $ 79,098 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------

The interim consolidated financial statements for the three months ended March 31, 2012 and 2011 have not been reviewed by an auditor.

---------------------------------------------------------------------------- ---------------------------------------------------------------------------- AASTRA TECHNOLOGIES LIMITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED) Stated in thousands of Canadian dollars MARCH 31st DECEMBER 31st MARCH 31st 2012 2011 2011 ---------------------------------------------------------------------------- ASSETS Current assets: Cash and cash equivalents $ 154,101 $ 129,933 $ 79,098 Short-term investments 4,103 4,202 4,163 Trade and other receivables 149,113 167,142 171,693 Current tax assets 6,053 7,348 4,503 Inventories 77,406 80,963 121,891 Finance lease receivables 20,618 21,336 19,539 Acquired lease receivables 369 462 642 Prepaid expenses and other assets 8,685 7,234 9,001 ---------------------------------------------------------------------------- 420,448 418,620 410,530 Long-term investment 5,836 5,406 5,251 Deferred tax assets 15,039 15,810 16,957 Finance lease receivables 21,571 23,469 26,209 Acquired lease receivables 114 138 534 Property, plant and equipment 29,405 30,953 36,841 Goodwill 47,232 46,323 48,215 Intangible assets 26,528 26,290 36,305 Other assets 500 516 623 ---------------------------------------------------------------------------- $ 566,673 $ 567,525 $ 581,465 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- LIABILITIES AND EQUITY Current liabilities: Trade and other payables $ 113,657 $ 116,165 $ 130,275 Current tax liabilities 28,759 30,394 25,092 Deferred income 36,440 36,222 34,890 Current portion of loans payable 382 512 16,246 Current portion of provisions 13,294 12,494 14,259 ---------------------------------------------------------------------------- 192,532 195,787 220,762 Pensions 38,074 37,566 25,658 Loans payable 114 138 551 Provisions 2,983 2,965 3,221 Deferred tax liabilities 7,368 7,851 10,420 Other liabilities 880 995 1,132 ---------------------------------------------------------------------------- 241,951 245,302 261,744 ---------------------------------------------------------------------------- Equity: Share capital 94,955 94,917 94,904 Contributed surplus 10,585 10,247 9,349 Translation reserves (3,193) (6,159) (3,443) Retained earnings 222,375 223,218 218,911 ---------------------------------------------------------------------------- 324,722 322,223 319,721 ---------------------------------------------------------------------------- $ 566,673 $ 567,525 $ 581,465 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------

The interim consolidated financial statements for the three months ended March 31, 2012 and 2011 have not been reviewed by an auditor.

Contacts:
Aastra Technologies Limited
Investor Relations
(905) 760-4200
investors@aastra.com


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