Aastra Reports Improved Earnings and Declares Dividend

• Press Release
• Source: Aastra Technologies Limited
• On 5:01 pm EDT, Monday October 19, 2009

TORONTO, ONTARIO--(Marketwire - Oct. 19, 2009) - Aastra Technologies Limited - (TSX:AAH - News) is pleased to report its unaudited financial results for the third quarter ended September 30, 2009 and, in connection with these improved results, the Board of Directors has declared a quarterly cash dividend of $0.15 per share on its common shares payable on November 24, 2009, to shareholders of record at the close of business on November 3, 2009.

Related Quotes

Symbol	Price	Change
AAH.TO	34.00	0.00

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

"Given our confidence in our financial strength, we are pleased to be able to return profits to our shareholders in the form of a quarterly dividend while satisfying our capital requirements and continuing with our long-term business strategy", said Francis N. Shen, Chairman and Co-CEO of Aastra.

Sales for the three months ended September 30, 2009 were $198.7 million compared to $224.5 million for the same quarter in 2008, a decrease of 11.5%. On a sequential basis, sales increased by 0.8% from sales of $197.2 million in the second quarter of this year, despite the fact that the third quarter is generally seasonally weaker in several of our major markets across Europe.

Gross margin was 44.7% of sales in the quarter compared to 45.1% of sales in the same period in 2008 and 45.6% of sales in the second quarter of 2009. Research and development expenses in the third quarter were $18.8 million or 9.5% of sales, compared to $29.7 million or 13.2% of sales in the same quarter of 2008.

Selling, general and administrative expenses were $49.6 million or 25.0% of sales in the third quarter compared to $58.8 million or 26.2% of sales in the third quarter of 2008. SG&A expenses decreased over the same period last year as well as on a sequential basis as the Company continued to focus on aggressively managing its cost structure in lieu of weaker end customer demand.

Amortization expense recorded in operating expenses was $6.2 million in the third quarter compared to $7.4 million in the same period last year. The Company recorded interest expense of $0.2 million in the third quarter this year compared to $0.9 million in the third quarter of 2008 as a result of both lower interest rates and a lower long-term debt balance. Losses from foreign exchange were $2.0 million in the third quarter of 2009 compared to losses of $1.3 million in the third quarter of 2008.

Investment income totalled $0.8 million in third quarter compared to $0.5 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 $2.8 million or 22.7% of pre-tax income compared to $0.7 million or 21.7% of pre-tax income in the same period last year.

As a result, net income for the third quarter was $9.6 million or $0.71 diluted earnings per share compared to $2.6 million or $0.17 diluted earnings per share in the same period last year and $5.5 million or $0.40 diluted earnings per share in the second quarter of 2009.

Cash and short-term investments increased to $105.6 million at the end of September 2009 compared to $80.6 million as at June 30, 2009 and $98.2 million at the end of December 2008. During the third quarter of 2009, the Company generated $37.8 million in cash flow from operations, bringing the total increase in cash flow from operations to $59.5 million for the nine months ended September 30, 2009.

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 - 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.

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 Management Discussion and Analysis ("MD&A") for fiscal 2008 as well as our MD&A for our third quarter of 2009, 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 EARNINGS (UNAUDITED)
Stated in thousands of Canadian dollars, except per share amounts

                                        YEAR-TO-DATE           3rd QUARTER
                                         Nine months          Three months
                                ended September 30th  ended September 30th

                                     2009       2008       2009       2008
--------------------------------------------------------------------------
  Sales                        $  615,093 $  570,292 $  198,666 $  224,464
  Cost of goods sold              331,199    319,396    109,853    123,237
--------------------------------------------------------------------------
                                  283,894    250,896     88,813    101,227
  Expenses (income):
    Selling, general and
     administrative               165,828    150,184     49,568     58,821
    Research and development       62,580     70,253     18,845     29,739
    Depreciation and
     amortization                  17,672     16,828      6,167      7,351
    Interest expense                1,109      1,502        176        898
    Foreign exchange loss           1,397      1,001      1,959      1,293
    Investment income              (2,157)    (2,605)      (778)      (540)
    Other charges                     399      1,135        399        350
--------------------------------------------------------------------------
  Earnings before income taxes     37,066     12,598     12,477      3,315
  Income taxes                      7,766      2,622      2,829        720
--------------------------------------------------------------------------
  Net earnings for the period  $   29,300 $    9,976 $    9,648 $    2,595
--------------------------------------------------------------------------
--------------------------------------------------------------------------
  Earnings per share:
    Basic                      $     2.09 $     0.63 $     0.71 $     0.17
    Diluted                    $     2.09 $     0.63 $     0.71 $     0.17
--------------------------------------------------------------------------
--------------------------------------------------------------------------

(i)  Actual common shares outstanding as at September 30, 2009 - 13,674,710
     (2008 - 15,540,573)
(ii) Weighted average common shares outstanding for the nine months and 
     three months ended September 30, 2009 - 14,007,901 and 13,674,710 
     (2008 - 15,778,848 and 15,540,062)

The interim consolidated financial statements for the nine months and three
months ended September 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           3rd QUARTER
                                         Nine months          Three months
                                ended September 30th  ended September 30th

                                     2009       2008       2009       2008
---------------------------------------------------------------------------
  Cash and cash equivalents
   provided by (used in):
  Operations:
    Net earnings for the period $  29,300  $   9,976  $   9,648  $   2,595
    Depreciation of property
     and equipment                 10,293      8,775      3,537      2,976
    Amortization of intangible
     assets                        11,042     11,230      3,686      5,461
    Future income taxes            (1,766)    (5,035)    (1,617)    (2,615)
    Stock-based compensation
     expense                        1,792      1,852        558        640
    Loss on sale of property
     and equipment                    359        283        149         41
    Other charges                     399      1,135        399        350
    Change in non-cash pension
     liabilities                      573      1,472        328        131
    Change in non-cash
     operating working capital      7,471    (20,680)    21,146     (2,669)
---------------------------------------------------------------------------
                                   59,463      9,008     37,834      6,910
---------------------------------------------------------------------------
  Financing:
    Issuance of common shares
     on exercise of options         3,395        193          -         16
    Repurchase of shares          (17,722)   (12,746)         -          -
    Receipt of acquired lease
     receivables                    2,863      5,679        976      2,211
    Payment of loan to Seller      (2,863)    (5,679)      (976)    (2,211)
    Increase in loans payable           -     58,940          -          -
    Payment of loans payable      (22,742)      (216)    (7,764)       (73)
    Decrease in bank
     indebtedness                       -        (16)         -          -
---------------------------------------------------------------------------
                                  (37,069)    46,155     (7,764)       (57)
---------------------------------------------------------------------------
  Investments:
    Maturity of short-term
     investments                        -     21,919          -      2,062
    Purchase of short-term
     investments                   (3,038)   (20,631)         -    (18,631)
    Interest received from
     long-term investment             417          -          -          -
    Proceeds on disposal of
     property and equipment            41         16         14          8
    Purchase of property and
     equipment                     (8,963)   (12,289)    (2,605)    (6,415)
    Business acquisitions, net
     of cash acquired                   -    (97,479)         -          -
---------------------------------------------------------------------------
                                  (11,543)  (108,464)    (2,591)   (22,976)
---------------------------------------------------------------------------
  Foreign exchange on cash held
   in foreign currency             (6,580)     3,656     (2,514)    (1,079)
---------------------------------------------------------------------------
  Increase (decrease) in cash
   and cash equivalents             4,271    (49,645)    24,965    (17,202)
  Cash and cash equivalents,
   beginning of period             97,637    112,802     76,943     80,359
---------------------------------------------------------------------------
  Cash and cash equivalents,
   end of period                $ 101,908  $  63,157  $ 101,908  $  63,157
---------------------------------------------------------------------------
---------------------------------------------------------------------------

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



AASTRA TECHNOLOGIES LIMITED
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
Stated in thousands of Canadian dollars

                                          SEPTEMBER    DECEMBER  SEPTEMBER
                                          30th 2009   31st 2008  30th 2008
----------------------------------------------------------------------------
  ASSETS
  Current assets:
    Cash and cash equivalents           $   101,908 $    97,637 $   63,157
    Short-term investments                    3,695         519     19,195
    Accounts receivable                     163,815     234,021    195,587
    Income taxes receivable                   7,080       8,201          -
    Inventories                              96,495     108,000    106,465
    Net investment in leases                  5,924       7,389      3,694
    Acquired lease receivables                1,998       3,729      3,848
    Prepaid expenses and other assets         7,392       8,751      9,625
    Future income tax assets                  5,190       9,615      8,999
---------------------------------------------------------------------------
                                            393,497     477,862    410,570

  Long-term investment                        4,600       5,416      5,861
  Future income tax assets                    4,822       4,430        996
  Net investment in leases                   34,733      19,456     12,774
  Acquired lease receivables                  2,037       3,718      4,046
  Property and equipment                     43,821      48,859     42,168
  Goodwill                                   49,333      50,269     12,089
  Intangible assets                          57,034      70,239    109,662
  Other assets                                  677         441        448
---------------------------------------------------------------------------
                                        $   590,554 $   680,690 $  598,614
---------------------------------------------------------------------------
---------------------------------------------------------------------------
  LIABILITIES AND SHAREHOLDERS' EQUITY
  Current liabilities:
    Indebtedness                        $         - $       337 $        -
    Accounts payable and accrued
     liabilities                            163,947     218,933    195,574
    Income taxes payable                     29,749      28,509     25,889
    Deferred revenue                         21,335      22,898     15,562
    Current portion of contingent
     consideration payable                        -           -      1,895
    Current portion of loans payable         17,665      27,276     26,929
    Future income tax liabilities             1,255       1,121        735
---------------------------------------------------------------------------
                                            233,951     299,074    266,584

  Pensions                                   25,923      27,556     21,882
  Loans payable                              17,838      35,537     35,266
  Future income tax liabilities              18,544      21,645      3,410
  Other long-term liabilities                 2,732       3,071      2,105
---------------------------------------------------------------------------
                                            298,988     386,883    329,247
---------------------------------------------------------------------------

  Shareholders' equity:
    Share capital                            85,613      90,951     95,639
    Contributed surplus                       8,276       6,484      5,881
    Accumulated other comprehensive
     income                                     582      19,588    (10,485)
    Retained earnings                       197,095     176,784    178,332
---------------------------------------------------------------------------
                                            291,566     293,807    269,367
---------------------------------------------------------------------------
                                        $   590,554 $   680,690 $  598,614
---------------------------------------------------------------------------
---------------------------------------------------------------------------

The interim consolidated financial statements for the nine months and three
months ended September 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                      Compre-
                           Contri-  Comprehen-                      hensive
           Common    Share   buted sive Income  Retained             Income 
           Shares  Capital Surplus       (Loss) Earnings     Total    (Loss)
----------------------------------------------------------------------------

Balance,
 December
 31,
 2008  14,765,573 $ 90,951 $ 6,484    $ 19,588 $ 176,784 $ 293,807  $     -

Shares
 issued
 on
 exercise
 of
 options  326,875    3,395       -           -         -     3,395        -

Stock-
 based
 compen-
 sation         -        -   1,234           -         -     1,234        -

Shares
 repur-
 chased
 for
 cancell-
 ation (1,417,738)  (8,733)      -           -    (8,989)  (17,722)       -

Trans-
 lation
 of
 self-
 sustaining
 operations     -        -       -     (11,230)        -   (11,230) (11,230)

Net
 earnings       -        -       -           -    19,652    19,652   19,652
----------------------------------------------------------------------------

Balance,
 June
 30,
 2009  13,674,710 $ 85,613  $7,718    $  8,358  $187,447  $289,136  $ 8,422

Stock-
 based
 compen-
 sation         -        -     558           -         -       558        -

Trans-
 lation
 of
 self-
 sustaining
 operations     -        -       -      (7,776)        -    (7,776)  (7,776)

Net
 earnings       -        -       -           -     9,648     9,648    9,648
----------------------------------------------------------------------------

Balance,
 September
 30,
 2009  13,674,710 $ 85,613 $ 8,276    $    582 $ 197,095 $ 291,566 $ 10,294

----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                   Accumulated   
                                         Other                      Compre-
                           Contri-  Comprehen-                      hensive
           Common    Share   buted sive Income  Retained             Income 
           Shares  Capital Surplus       (Loss) Earnings     Total    (Loss)
----------------------------------------------------------------------------

Balance,
 December
 31,
 2007  16,015,323 $ 98,442 $ 4,029   $(15,530) $ 178,106 $ 265,047  $     -

Shares
 issued
 on
 exercise
 of
 options   11,250     177        -          -          -       177        -

Stock-
 based
 compen-
 sation         -       -    1,212          -          -     1,212        -

Shares
 repur-
 chased
 for
 cancell-
 ation   (487,000) (2,996)       -          -     (9,750)  (12,746)       -

Trans-
 lation
 of
 self-
 sustaining
 operations     -       -        -     17,387          -    17,387   17,387

Net
 earnings       -       -        -          -      7,381     7,381    7,381
----------------------------------------------------------------------------

Balance,
 June
 30,
 2008  15,539,573 $95,623  $ 5,241   $  1,857  $ 175,737 $ 278,458 $ 24,768

Shares
 issued
 on
 exercise
 of
 options    1,000      16        -          -          -        16        -

Stock-
 based
 compen-
 sation         -       -      640          -          -       640        -

Trans-
 lation
 of
 self-
 sustaining
 operations     -       -        -    (12,342)         -   (12,342) (12,342)

Net
 earnings       -       -        -          -      2,595     2,595    2,595
----------------------------------------------------------------------------

Balance,
 September
 30,
 2008  15,540,573 $95,639  $ 5,881   $(10,485) $ 178,332 $ 269,367 $ 15,021
----------------------------------------------------------------------------
----------------------------------------------------------------------------

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

Kathy Ristic
Aastra Technologies Limited
V.P. Finance
(905) 760-4200
investors@aastra.com