Aastra Reports Continued Profitability

• Press Release
• Source: Aastra Technologies Limited
• On 4:31 pm EDT, Monday July 27, 2009

TORONTO, ONTARIO--(Marketwire - July 27, 2009) - Aastra Technologies Limited - (TSX:AAH - News) is pleased to report its unaudited financial results for the second quarter ended June 30, 2009.

Related Quotes

Symbol	Price	Change
AAH.TO	32.70	0.00

{"s" : "aah.to","k" : "c10,l10,p20,t10","o" : "","j" : ""}

Sales for the three months ended June 30, 2009 were $197.2 million compared to $205.8 million for the same quarter in 2008, a decrease of 4.2%. The Company's sales results for the second quarter of last year include two months of revenue from the acquisition of the Ericsson Enterprise Communications Business which closed on April 30, 2008. On a sequential basis, sales decreased by 10.1% from sales of $219.3 million in the first quarter of this year as a result of the weak economic conditions experienced in several markets.

Gross margin was 45.6% of sales in the quarter compared to 42.5% of sales in the same period in 2008 and 48.0% of sales in the first quarter of 2009. Research and development expenses in the second quarter were $21.8 million or 11.1% of sales, compared to $26.8 million or 13.0% of sales in the same quarter of 2008.

Selling, general and administrative expenses were $56.0 million or 28.4% of sales in the second quarter compared to $53.2 million or 25.8% of sales in the second quarter of 2008. As a percentage of sales, SG&A expenses increased over the same period last year as operating costs could not be reduced as quickly as the decline in sales that was experienced during the quarter.

Amortization expense recorded in operating expenses was $5.6 million in the second quarter compared to $6.2 million in the same period last year. The Company recorded interest expense of $0.2 million in the second quarter this year compared to $0.6 million in the second quarter of 2008 as a result of both lower interest rates and a lower long-term debt balance. Losses from foreign exchange were $0.3 million in the second quarter of 2009 compared to a foreign exchange gain of $1.2 million in the second quarter of 2008, due to the strengthening of the Canadian dollar compared to the Euro and U.S. dollar during the second quarter this year.

Investment income totaled $0.7 million in second quarter compared to $0.8 million in the same quarter of 2008. While the investment income earned on excess cash in the quarter has decreased sharply compared to last year, the Company earned a higher amount of financing income on its leasing business. Income tax expense was $1.2 million or 18.2% of pre-tax income compared to $0.4 million or 15.5% of pre-tax income in the same period last year.

As a result, net income for the second quarter was $5.5 million or $0.40 diluted earnings per share compared to $2.1 million or $0.13 diluted earnings per share in the same period last year.

Cash and short-term investments totaled $80.6 million at the end of June 2009 compared to $66.9 million as at March 31, 2009 and $98.2 million at the end of December 2008. During the second quarter of 2009, the Company generated $15.1 million in cash flow from operations, inclusive of an increase in its net investment in leases of approximately $6 million.

About Aastra Technologies Limited

Aastra Technologies Limited (TSX:AAH - News) 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 networking products, including terminals, systems, and applications. For additional information on Aastra, visit our website at http://www.aastra.com.

From time to time, we make written or oral forward-looking statements within the meaning of applicable Canadian securities legislation. We may make such statements in this press release, in other filings with Canadian regulators in reports to shareholders or in other communications. These forward-looking statements include, among others, statements with respect to our objectives, and strategies to achieve our objectives, as well as statements with respect to our beliefs, outlooks, plans, objectives, expectations, anticipations, estimates and intentions. The words "may," "could," "should," "would," "suspect," "outlook," "believe," "plan," "anticipate," "estimate," "expect," "intend," "forecast," "objective" and words and expressions of similar import are intended to identify forward-looking statements. 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 predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution readers not to place undue reliance on these statements as a number of important factors could cause our actual results to differ materially from the expectations expressed in such forward-looking statements.

As described in detail under the heading "Risk Factors" in our Annual Information Form filed on www.sedar.com, the material factors that could cause our actual results to differ materially from the forward-looking statements in this press release include: the global economical and financial crisis impacting businesses worldwide, exchange rate fluctuation of the Canadian dollar against other currencies, particularly with respect to the Swiss franc, Swedish krona, Euro and US dollar; product concentration and limited range of products; continued demand for our products; geographic market concentration in Europe; reliance on third party manufacturers and component suppliers; longer credit terms to customers; continued implementation of our enterprise resource planning system; potential fluctuations in quarterly financial results, particularly as a result of seasonality and geographic market concentration; risks associated with product returns and defects; consolidation, reorganization and rapid technological change in our market; competition and the risk of third party claims for infringement; and other risk factors that our business faces.

We caution that the foregoing list of important factors that may affect future results is not exhaustive. When relying on our forward-looking statements to make decisions with respect to us, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Additional information about these factors that may affect future results can be found under the "Risk Factors" section and in our 2008 Annual Information Form. We do not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by us or on our behalf.

AASTRA TECHNOLOGIES LIMITED
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
Stated in thousands of Canadian dollars, except per share amounts

                                        YEAR-TO-DATE         2nd QUARTER
                                         Six months          Three months
                                      ended June 30th      ended June 30th

                                      2009       2008       2009      2008
---------------------------------------------------------------------------

Sales                            $ 416,427  $ 345,828  $ 197,151 $ 205,793

Cost of goods sold                 221,346    196,159    107,222   118,252
---------------------------------------------------------------------------
                                   195,081    149,669     89,929    87,541

Expenses (income):

 Selling, general and
  administrative                   116,260     91,363     55,987    53,176

 Research and development           43,735     40,514     21,826    26,840

 Depreciation and amortization      11,505      9,477      5,607     6,150

 Interest expense                      933        604        197       587

 Foreign exchange (gain) loss         (562)      (292)       270    (1,241)

 Investment income                  (1,379)    (2,065)      (708)     (766)

 Other charges                           -        785          -       280
---------------------------------------------------------------------------

Earnings before income taxes        24,589      9,283      6,750     2,515

Income taxes                         4,937      1,902      1,231       390
---------------------------------------------------------------------------

Net earnings for the period      $  19,652  $   7,381  $   5,519 $   2,125
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Earnings per share:

 Basic                           $    1.44  $    0.46  $    0.41 $    0.13

 Diluted                         $    1.44  $    0.46  $    0.40 $    0.13
---------------------------------------------------------------------------
---------------------------------------------------------------------------

(i) Actual common shares outstanding as at June 30, 2009 - 13,674,710
    (2008 - 15,539,573)

(ii) Weighted average common shares outstanding for the six months and
     three months ended June 30, 2009 - 13,691,626 and 13,552,444 (2008 -
     15,900,220 and 15,783,222)

The interim consolidated financial statements for the six months and three
months ended June 30, 2009 have not been reviewed by an auditor.

---------------------------------------------------------------------------
---------------------------------------------------------------------------



AASTRA TECHNOLOGIES LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Stated in thousands of Canadian dollars

                                        YEAR-TO-DATE         2nd QUARTER
                                         Six months          Three months
                                      ended June 30th      ended June 30th

                                       2009      2008       2009      2008
---------------------------------------------------------------------------

Cash and cash equivalents
 provided by (used in):

Operations:

 Net earnings for the period       $ 19,652   $ 7,381    $ 5,519   $ 2,125

 Depreciation of property and
  equipment                           6,756     5,799      3,442     3,077

 Amortization of intangible
  assets                              7,356     5,769      3,655     4,171

 Future income taxes                   (149)   (2,420)     1,762    (2,344)

 Stock-based compensation expense     1,234     1,212        590       638

 Loss on short-term investments           -         -          -       (13)

 Loss on sale of property and
  equipment                             210       242         42       102

 Other charges                            -       785          -       280

 Change in non-cash pension
  liabilities                           245     1,341         73     1,157

 Change in non-cash operating
  working capital                   (13,675)  (18,012)        (3)  (22,833)
---------------------------------------------------------------------------
                                     21,629     2,097     15,080   (13,640)
---------------------------------------------------------------------------

Financing:

 Issuance of common shares on
  exercise of options                 3,395       177      2,588        65

 Repurchase of shares               (17,722)  (12,746)         -   (12,746)

 Receipt of acquired lease
  receivables                         1,887     3,468        900     1,692

 Payment of loan to Seller           (1,887)   (3,468)      (900)   (1,692)

 Increase in loans payable                -    58,940          -    58,940

 Payment of loans payable           (14,978)     (142)       (79)      (73)

 Decrease in bank indebtedness            -       (16)         -         -
---------------------------------------------------------------------------

                                    (29,305)   46,213      2,509    46,186
---------------------------------------------------------------------------

Investments:

 Maturity of short-term
  investments                             -    19,857          -     3,425

 Purchase of short-term
  investments                        (3,038)   (2,000)         -         -

 Interest received from
  long-term investment                  417         -        122         -

 Proceeds on disposal of property
  and equipment                          27         8         25         2

 Purchase of property and
  equipment                          (6,358)   (5,874)    (3,157)   (3,302)

 Business acquisitions, net of
  cash acquired                           -   (97,479)         -   (97,479)
---------------------------------------------------------------------------

                                     (8,952)  (85,488)    (3,010)  (97,354)
---------------------------------------------------------------------------

Foreign exchange on cash held
 in foreign currency                 (4,066)    4,735       (968)   (2,695)
---------------------------------------------------------------------------

Increase (decrease) in cash and
 cash equivalents                   (20,694)  (32,443)    13,611   (67,503)

Cash and cash equivalents,
 beginning of period                 97,637   112,802     63,332   147,862
---------------------------------------------------------------------------

Cash and cash equivalents, end
 of period                         $ 76,943  $ 80,359   $ 76,943  $ 80,359
---------------------------------------------------------------------------
---------------------------------------------------------------------------

The interim consolidated financial statements for the six months and three
months ended June 30, 2009 have not been reviewed by an auditor.

---------------------------------------------------------------------------
---------------------------------------------------------------------------



AASTRA TECHNOLOGIES LIMITED
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
Stated in thousands of Canadian dollars
                                                                          
                                       JUNE 30th DECEMBER 31st   JUNE 30th
                                            2009          2008        2008
---------------------------------------------------------------------------

ASSETS
Current assets:
 Cash and cash equivalents           $    76,943 $      97,637 $    80,359
 Short-term investments                    3,639           519       2,590
 Accounts receivable                     190,687       234,021     203,418
 Income taxes receivable                   8,847         8,201           -
 Inventories                             102,173       108,000     116,614
 Net investment in leases                  7,551         7,389       2,696
 Acquired lease receivables                2,562         3,729       5,073
 Prepaid expenses and other assets         8,448         8,751       8,465
 Future income tax assets                  6,264         9,615       8,780
---------------------------------------------------------------------------
                                         407,114       477,862     427,995

Long-term investment                       4,999         5,416       6,211
Future income tax assets                   4,709         4,430       1,263
Net investment in leases                  32,330        19,456       8,234
Acquired lease receivables                 2,642         3,718       5,686
Property and equipment                    46,715        48,859      41,218
Goodwill                                  48,498        50,269      12,481
Intangible assets                         60,260        70,239     123,177
Other assets                                 709           441         475
---------------------------------------------------------------------------

                                     $   607,976 $     680,690 $   626,740
---------------------------------------------------------------------------
---------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
 Indebtedness                        $         - $         337 $         -
 Accounts payable and accrued
  liabilities                            175,884       218,933     206,697
 Income taxes payable                     27,532        28,509      25,938
 Deferred revenue                         23,584        22,898      12,528
 Current portion of contingent
  consideration payable                        -             -       1,997
 Current portion of loans payable         17,831        27,276      22,056
 Future income tax liabilities               274         1,121         665
---------------------------------------------------------------------------
                                         245,105       299,074     269,881

Pensions                                  26,595        27,556      23,392
Loans payable                             25,722        35,537      48,816
Future income tax liabilities             18,551        21,645       3,911
Other long-term liabilities                2,867         3,071       2,282
---------------------------------------------------------------------------

                                         318,840       386,883     348,282
---------------------------------------------------------------------------

Shareholders' equity:
 Share capital                            85,613        90,951      95,623
 Contributed surplus                       7,718         6,484       5,241
 Accumulated other comprehensive
  income                                   8,358        19,588       1,857
 Retained earnings                       187,447       176,784     175,737
---------------------------------------------------------------------------

                                         289,136       293,807     278,458
---------------------------------------------------------------------------

                                     $   607,976 $     680,690 $   626,740
---------------------------------------------------------------------------
---------------------------------------------------------------------------

The interim consolidated financial statements for the six months and three
months ended June 30, 2009 have not been reviewed by an auditor.

---------------------------------------------------------------------------
---------------------------------------------------------------------------



AASTRA TECHNOLOGIES LIMITED
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME
(UNAUDITED)
Stated in thousands of Canadian dollars, except share amounts
----------------------------------------------------------------------------
                                                                Accumulated
                                                                      Other
                             Common       Share  Contributed  Comprehensive
                             Shares     Capital      Surplus  Income (Loss)
----------------------------------------------------------------------------
Balance, December 31,
 2008                    14,765,573 $    90,951 $      6,484 $       19,588
Shares issued on
 exercise of options         85,000         807            -              -
Stock-based compensation          -           -          644              -
Shares repurchased for
 cancellation            (1,417,738)     (8,733)            -             -
Translation of
 self-sustaining
 operations                       -           -            -         (3,787)
Net earnings                      -           -            -              -
----------------------------------------------------------------------------
Balance, March 31, 2009  13,432,835 $    83,025 $      7,128 $       15,801
Shares issued on
 exercise of options        241,875       2,588            -              -
Stock-based compensation          -           -          590              -
Translation of
 self-sustaining
 operations                       -           -            -         (7,443)
Net earnings                      -           -            -              -
----------------------------------------------------------------------------

Balance, June 30, 2009   13,674,710 $    85,613 $      7,718 $        8,358
----------------------------------------------------------------------------
----------------------------------------------------------------------------

                                                                Accumulated
                                                                      Other
                             Common       Share  Contributed  Comprehensive
                             Shares     Capital      Surplus  Income (Loss)
----------------------------------------------------------------------------
Balance, December 31,
 2007                    16,015,323 $    98,442 $      4,029 $      (15,530)
Shares issued on
 exercise of options          6,250         112            -              -
Stock-based compensation          -           -          574              -
Translation of
 self-sustaining
 operations                       -           -            -         21,317
Net earnings                      -           -            -              -
----------------------------------------------------------------------------
Balance, March 31, 2008  16,021,573 $    98,554 $      4,603 $        5,787
Shares issued on
 exercise of options          5,000          65            -              -
Stock-based compensation          -           -          638              -
Shares repurchased for
 cancellation              (487,000)     (2,996)           -              -
Translation of
 self-sustaining
 operations                       -           -            -         (3,930)
Net earnings                      -           -            -              -
----------------------------------------------------------------------------

Balance, June 30, 2008   15,539,573 $    95,623 $      5,241 $        1,857
----------------------------------------------------------------------------
----------------------------------------------------------------------------


AASTRA TECHNOLOGIES LIMITED
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME
(UNAUDITED )
Stated in thousands of Canadian dollars, except share amounts
-----------------------------------------------------------


                          Retained            Comprehensive
                          Earnings     Total   Income (Loss)
------------------------------------------------------------
Balance, December 31,
 2008                   $  176,784 $ 293,807 $            -
Shares issued on
 exercise of options             -       807              -
Stock-based compensation         -       644              -
Shares repurchased for
 cancellation               (8,989)  (17,722)             -
Translation of
 self-sustaining
 operations                      -    (3,787)        (3,787)
Net earnings                14,133    14,133         14,133
------------------------------------------------------------
Balance, March 31, 2009 $  181,928 $ 287,882 $       10,346
Shares issued on
 exercise of options             -     2,588              -
Stock-based compensation         -       590              -
Translation of
 self-sustaining
 operations                      -    (7,443)        (7,443)
Net earnings                 5,519     5,519          5,519
------------------------------------------------------------

Balance, June 30, 2009  $  187,447 $ 289,136 $        8,422
------------------------------------------------------------
------------------------------------------------------------



                          Retained            Comprehensive
                          Earnings     Total   Income (Loss)
------------------------------------------------------------
Balance, December 31,
 2007                   $  178,106 $ 265,047 $            -
Shares issued on
 exercise of options             -       112              -
Stock-based compensation         -       574              -
Translation of
 self-sustaining
 operations                      -    21,317         21,317
Net earnings                 5,256     5,256          5,256
------------------------------------------------------------
Balance, March 31, 2008 $  183,362 $ 292,306 $       26,573
Shares issued on
 exercise of options             -        65              -
Stock-based compensation         -       638              -
Shares repurchased for
 cancellation               (9,750)  (12,746)             -
Translation of
 self-sustaining
 operations                      -    (3,930)        (3,930)
Net earnings                 2,125     2,125          2,125
------------------------------------------------------------

Balance, June 30, 2008  $  175,737 $ 278,458 $       24,768
------------------------------------------------------------
------------------------------------------------------------

The interim consolidated financial statements for the six months 
and three months ended June 30, 2009 have not been reviewed by an
auditor.

Kathy Ristic
Aastra Technologies Limited
V.P. Finance
(905) 760-6704
investors@aastra.com