Aastra Reports Strong Fourth Quarter Earnings

Marketwired

TORONTO, ONTARIO--(Marketwire - Feb. 15, 2012) - Aastra Technologies Limited - (TSX:AAH.TO - News) today reported its unaudited financial results for the three months and year ended December 31, 2011. Note that certain 2010 numbers have been restated to comply with the new IFRS accounting rules for Canadian companies adopted by Aastra on January 1, 2011. The Company is pleased to report a significant rebound in net earnings and cash flow from operations in the fourth quarter ended December 31, 2011.

Sales for the three months ended December 31, 2011 were $199.7 million compared to $214.9 million for the same quarter in 2010, a decrease of 7.1%. Excluding the impact of changes in foreign exchange from the strengthening of the Canadian dollar, sales decreased by 8.3% over the same period last year. In addition, following seasonal trends in Europe, sales for the fourth quarter in 2011 increased 27.0% from sales in the third quarter of the year.

Sales for the year ended December 31, 2011 were $693.0 million compared to $716.9 million for 2010. Excluding the impact of foreign exchange, sales declined by 5.2% in the twelve months ended December 31, 2011 compared to the same period of 2010.

Gross margin decreased slightly to 43.2% of sales in the fourth quarter of 2011 compared to 44.4% of sales in the same period in 2010. Gross margin for the year ended December 31, 2011 decreased slightly to 42.3% compared to 43.4% for the year in 2010.

Research and development ("R&D") expenses in the fourth quarter of 2011 were $14.8 million or 7.4% of sales, compared to $18.0 million or 8.4% of sales in the final quarter of 2010. R&D expenses for the year ended December 31, 2011 decreased to $63.2 million or 9.1% of sales from $69.2 million or 9.7% of sales in 2010 as a result of efficiencies across its various development centers.

Selling, general and administrative ("SG&A") expenses were $44.4 million or 22.2% of sales in the fourth quarter of 2011 compared to $51.1 million or 23.8% of sales in the fourth quarter of 2010. SG&A expenses for the year ended December 31, 2011 decreased to $178.5 million or 25.8% of sales compared to $184.8 million or 25.8% of sales for the year in 2010. The Company continues to invest in customer focused activities while obtaining efficiencies in its administration processes.

Losses from the impact of foreign exchange were $1.3 million in the fourth quarter of 2011, compared to foreign exchange losses of $2.6 million incurred in the same period of 2010. Foreign exchange losses were $3.5 million for the year in 2011 compared to $10.0 million for 2010 mainly as a result of the general strengthening of the Swiss franc compared to the Euro over these periods.

The Company earned finance income of $0.7 million in the fourth quarter of 2011, compared to $1.6 million in the same period in 2010. Finance income for the year in 2011 was relatively stable at $3.6 million compared to $3.8 million for 2010. Other income for the year ended December 31, 2010 includes a gain of $2.7 million realized on the sale of a product line earlier in the year.

As a result of the above, profit of the Company for the three months ended December 31, 2011 was $18.2 million or $1.30 diluted earnings per share compared to $16.0 million or $1.13 diluted earnings per share in the same period in 2010. Profit for the year ended December 31, 2011 was $26.2 million or $1.85 diluted earnings per share compared to $25.4 million or $1.80 diluted earnings per share in 2010.

Cash and short-term investments totaled $134.1 million at the end of 2011 compared to a balance of $94.9 million at the end of 2010. During the fourth quarter of 2011, the Company generated $24.3 million of cash flow from operations. For the year, the Company generated $70.4 million of cash flow from operations as a result of continued profitability as well as improvements in its inventory management. In addition, the Company repaid $15.9 million of long term debt during 2011, paid $11.3 million in dividends to its common shareholders and invested in $5.9 million in property, plant and equipment and intangible assets during 2011.

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 March 22, 2012 to all shareholders of record on March 1, 2012. 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.

As the Company continues with its initiatives to improve its corporate governance practices, the Company announces that Mr. Hugues Scholaert has voluntarily elected not to stand for re-election for the Company's board of directors at the upcoming annual meeting of shareholders. As a result, the Company expects to have a majority of independent nominees stand for election to its board of directors at its upcoming annual meeting.

About Aastra Technologies Limited

Aastra Technologies Limited (TSX:AAH.TO - 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 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.





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AASTRA TECHNOLOGIES LIMITED                                                 

CONSOLIDATED STATEMENTS OF PROFIT (UNAUDITED)                               

Stated in thousands of Canadian dollars, except per share amounts           

                                                                            

                                     YEAR-TO-DATE           4th QUARTER     

                                     Twelve months         Three months     

                                  ended December 31st   ended December 31st 

                                      2011       2010       2011       2010 

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Revenue                          $ 692,994  $ 716,936  $ 199,681  $ 214,870 

Cost of sales                      399,786    405,926    113,335    119,389 

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                                   293,208    311,010     86,346     95,481 

Expenses (income):                                                          

 Selling, general and                                                       

  administrative                   178,476    184,806     44,369     51,108 

 Research and development           63,160     69,208     14,795     18,015 

 Depreciation and amortization      20,328     21,941      4,894      5,553 

 Foreign exchange loss               3,521      9,999      1,341      2,641 

 Other income                            -     (2,682)         -          - 

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Results from operating                                                      

 activities                         27,723     27,738     20,947     18,164 

Finance income                      (3,600)    (3,750)      (747)    (1,575)

Finance expense                        344        589         54        120 

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Profit before income taxes          30,979     30,899     21,640     19,619 

Income taxes                         4,807      5,511      3,425      3,573 

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Profit for the period            $  26,172  $  25,388  $  18,215  $  16,046 

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Earnings per share:                                                         

 Basic                           $    1.86  $    1.81  $    1.30  $    1.14 

 Diluted                         $    1.85  $    1.80  $    1.30  $    1.13 

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(i)    Actual common shares outstanding as at December 31, 2011 - 14,031,485

       (2010 - 14,054,385)                                                  

                                                                            

(ii)   Weighted average common shares outstanding for the twelve months and 

       three months ended December 31, 2011 - 14,061,422 and 14,032,739     

       (2010 - 13,994,884 and 14,044,168)                                   

                                                                            

(iii)  Weighted average fully diluted common shares outstanding for the     

       twelve months and three months ended December 31, 2011 - 14,155,347  

       and 14,032,739 (2010 - 14,128,941 and 14,159,870)                    

                                                                            

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The interim consolidated financial statements for the twelve months and     

three months ended December 31, 2011 and 2010 have not been reviewed by an  

auditor.                                                                    

                                                                            

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AASTRA TECHNOLOGIES LIMITED                                                 

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)                           

Stated in thousands of Canadian dollars                                     

                                                                            

                                        YEAR-TO-DATE        4th QUARTER     

                                       Twelve months        Three months    

                                    ended December 31st ended December 31st 

                                         2011      2010      2011      2010 

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Cash and cash equivalents provided                                          

 by (used in):                                                              

Operating activities:                                                       

  Profit for the period             $  26,172 $  25,388 $  18,215 $  16,046 

  Depreciation of property, plant                                           

   and equipment                       11,402    11,686     2,804     3,110 

  Amortization of intangible assets    13,400    14,546     3,140     3,640 

  Share-based compensation expense      1,394     1,754       234       530 

  Loss on sale of property, plant                                           

   and equipment                        1,130       726       640       279 

  Other income                              -    (2,682)        -         - 

  Finance income                       (3,600)   (3,750)     (747)   (1,575)

  Finance expenses                        344       589        54       120 

  Income tax expense                    4,807     5,511     3,425     3,573 

  Change in non-cash pension                                                

   liabilities                           (766)      169    (1,497)     (173)

  Change in non-cash operating                                              

   working capital                     22,569   (39,601)     (468)  (11,351)

  Income taxes (paid) received         (6,471)   (8,282)   (1,455)    1,704 

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                                       70,381     6,054    24,345    15,903 

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Investing activities:                                                       

  Maturity of short-term investments    4,092     3,199     4,092       131 

  Purchase of short-term investments   (4,092)   (4,044)   (4,092)   (4,044)

  Interest received                     3,523     2,866     1,064       801 

  Proceeds on disposal of property,                                         

   plant and equipment                     11        43         3        34 

  Purchase of property, plant and                                           

   equipment                           (5,102)  (11,193)   (1,200)   (3,160)

  Purchase of intangible assets          (821)   (1,413)     (381)     (356)

  Disposition, net of cash                  -     3,649         -         - 

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                                       (2,389)   (6,893)     (514)   (6,594)

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Financing activities:                                                       

  Dividends paid to shareholders      (11,258)  (11,197)   (2,814)   (2,810)

  Proceeds from exercise of share                                           

   options                                851     3,273       600       210 

  Repurchase of shares                 (1,359)        -    (1,359)        - 

  Receipt of acquired lease                                                 

   receivables                            740     1,505       162       349 

  Payment of acquired loan payable       (740)   (1,505)     (162)     (349)

  Increase in loans payable               300         -         -         - 

  Repayment of loans payable          (15,894)  (14,948)      (39)      (74)

  Finance costs paid                     (314)     (528)      (37)       (8)

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                                      (27,674)  (23,400)   (3,649)   (2,682)

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Foreign exchange on cash held in                                            

 foreign currency                      (1,089)    1,347    (4,519)    2,105 

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Increase (decrease) in cash and cash                                        

 equivalents                           39,229   (22,892)   15,663     8,732 

Cash and cash equivalents, beginning                                        

 of period                             90,704   113,596   114,270    81,972 

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Cash and cash equivalents, end of                                           

 period                             $ 129,933 $  90,704 $ 129,933 $  90,704 

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The interim consolidated financial statements for the twelve months and     

three months ended December 31, 2011 and 2010 have not been reviewed by an  

auditor.                                                                    

                                                                            

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AASTRA TECHNOLOGIES LIMITED                                                 

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)                   

Stated in thousands of Canadian dollars                                     

                                                                            

                                        DECEMBER      DECEMBER       JANUARY

                                       31st 2011     31st 2010      1st 2010

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ASSETS                                                                      

Current assets:                                                             

  Cash and cash equivalents           $  129,933    $   90,704    $  113,596

  Short-term investments                   4,202         4,153         3,309

  Trade and other receivables            167,142       183,977       175,082

  Current tax assets                       7,348         5,225         5,986

  Inventories                             80,963       115,374        81,398

  Finance lease receivables               21,336        17,426        11,831

  Acquired lease receivables                 462           714         1,544

  Prepaid expenses and other assets        7,234         7,279         7,088

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                                         418,620       424,852       399,834

                                                                            

Long-term investment                       5,406         5,251         4,525

Deferred tax assets                       15,810        14,015        13,230

Finance lease receivables                 23,469        24,324        28,597

Acquired lease receivables                   138           607         1,597

Property, plant and equipment             30,953        37,510        41,918

Goodwill                                  46,323        46,321        46,391

Intangible assets                         26,290        38,489        53,965

Other assets                                 516           625           611

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                                      $  567,525    $  591,994    $  590,668

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LIABILITIES AND EQUITY                                                      

Current liabilities:                                                        

  Trade and other payables            $  116,165    $  143,043    $  122,745

  Current tax liabilities                 30,394        29,467        33,294

  Deferred income                         36,222        33,524        31,741

  Current portion of loans payable           512        15,740        16,490

  Current portion of provisions           12,494        14,065        16,447

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                                         195,787       235,839       220,717

                                                                            

Pensions                                  37,566        24,305        31,332

Loans payable                                138           658        16,561

Provisions                                 2,965         2,970         3,512

Deferred tax liabilities                   7,851        10,493        13,735

Other liabilities                            995         1,154         1,481

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                                         245,302       275,419       287,338

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Equity:                                                                     

  Share capital                           94,917        94,653        90,488

  Contributed surplus                     10,247         8,892         8,030

  Translation reserves                    (6,159)       (8,511)            -

  Retained earnings                      223,218       221,541       204,812

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                                         322,223       316,575       303,330

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                                      $  567,525    $  591,994    $  590,668

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The interim consolidated financial statements for the twelve months and     

three months ended December 31, 2011 and 2010 have not been reviewed by an  

auditor.                                                                    



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

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