The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from Marketwire

Aastra Reports Strong Fourth Quarter Results

Tuesday, February 15, 2011

Aastra Reports Strong Fourth Quarter Results17:01 EST Tuesday, February 15, 2011TORONTO, ONTARIO--(Marketwire - Feb. 15, 2011) - Aastra Technologies Limited - (TSX:AAH) today reported its unaudited financial results for the three months and year ended December 31, 2010. The Company is pleased to report a significant rebound in net earnings as a result of strong revenues recorded in the fourth quarter ended December 31, 2010. Sales for the three months ended December 31, 2010 were $216.0 million compared to $217.8 million for the same quarter in 2009, a decrease of 0.8%. Excluding the impact of changes in foreign exchange from the strengthening of the Canadian dollar, sales increased by 8.7% over the same period last year. In addition, sales for the fourth quarter in 2010 increased sequentially from sales of the third quarter of 2010 by 31.6% as a result of significant increases in many of our key markets. Sales for the year ended December 31, 2010 were $720.9 million compared to $832.9 million for 2009. Excluding the impact of foreign exchange, sales declined by 3.0% in the twelve months ended December 31, 2010 compared to the same period of 2009. Gross margin decreased slightly to 44.5% of sales in the fourth quarter of 2010 compared to 45.0% of sales in the same period in 2009. Gross margin for the year ended December 31, 2010 decreased slightly to 43.6% compared to 45.9% for the year in 2009. Gross margins for 2010 were negatively impacted by the impact of foreign exchange on the purchase of our inventory as well as an unfavorable product mix.Research and development ("R&D") expenses in the fourth quarter of 2010 were $18.2 million or 8.4% of sales, compared to $19.2 million or 8.8% of sales in the final quarter of 2009. R&D expenses for the year ended December 31, 2010 decreased to $69.4 million or 9.6% of sales from $81.8 million or 9.8% of sales in 2009. Selling, general and administrative ("SG&A") expenses were $52.9 million or 24.5% of sales in the fourth quarter of 2010 compared to $51.6 million or 23.7% of sales in the fourth quarter of 2009. SG&A expenses for the year ended December 31, 2010 decreased to $189.4 million or 26.3% of sales compared to $217.4 million or 26.1% of sales for the year in 2009. Losses from the impact of foreign exchange were $2.6 million in the fourth quarter of 2010, comparable to foreign exchange losses of $2.2 million incurred in the same period of 2009. Foreign exchange losses were $10.0 million for the year in 2010 compared to $3.6 million for 2009 as a result of the general strengthening of the Canadian dollar and Swiss franc compared to the Euro and the U.S. dollar over these periods. The Company earned interest income of $0.7 million in both fourth quarters of 2010 and 2009 while for the year, investment income was $2.6 million in 2010 compared to $2.8 million in 2009. Other income of $0.7 million was earned in the fourth quarter of 2010 as a result of an increase in the valuation of a long-term investment. 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, net earnings of the Company for the three months ended December 31, 2010 were $14.4 million or $1.02 diluted earnings per share compared to $15.3 million or $1.09 diluted earnings per share in the same period in 2009. Net earnings for the year ended December 31, 2010 were $24.0 million or $1.69 diluted earnings per share compared to $44.6 million or $3.20 diluted earnings per share in 2009. Cash and short-term investments totaled $94.9 million at the end of 2010 compared to a balance of $116.9 million at the end of 2009. During the fourth quarter of 2010, the Company generated $16.7 million of cash flow from operations, net of working capital increases. For the year, the Company generated $8.4 million of cash flow from operations, net of significant increases in working capital, primarily inventory and accounts receivable during the year. In addition, the Company repaid $14.9 million of long term debt during 2010 and invested in $12.6 million in property, plant and equipment and intangible assets during 2010.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 24, 2011 to all shareholders of record on March 3, 2011. 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 LIMITEDCONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)Stated in thousands of Canadian dollars, except per share amountsYEAR-TO-DATE Twelve months ended December 31st4th QUARTER Three months ended December 31st2010200920102009Sales$720,860$832,897$215,960$217,804Cost of goods sold406,404451,012119,828119,813314,456381,88596,13297,991Expenses (income):Selling, general and administrative189,405217,42552,91351,597Research and development69,39081,81718,19719,237Depreciation and amortization20,97922,9615,2735,289Interest expense3801,22698117Foreign exchange loss10,0453,5972,6402,200Investment income(2,647)(2,836)(744)(679)Other (income) charges(3,416)399(734)-Earnings before income taxes30,32057,29618,48920,230Income taxes6,36412,6854,1164,919Net earnings for the period$23,956$44,611$14,373$15,311Earnings per share:Basic$1.71$3.26$1.02$1.11Diluted$1.69$3.20$1.02$1.09* Actual common shares outstanding as at December 31, 2010 – 14,054,385 (2009 – 13,852,335)** Weighted average common shares outstanding for the twelve months and three months ended December 31, 2010 – 13,994,884 and 14,044,168 (2009 – 13,705,274 and 13,761,592)*** Weighted average fully diluted common shares outstanding for the twelve months and three months ended December 31, 2010 – 14,140,652 and 14,153,524 (2009 – 13,920,085 and 14,015,679)The interim consolidated financial statements for the twelve months and three months ended December 31, 2010 have not been reviewed by an auditor.AASTRA TECHNOLOGIES LIMITEDCONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)Stated in thousands of Canadian dollarsYEAR-TO-DATE Twelve months ended December 31st4th QUARTER Three months ended December 31st2010200920102009Cash and cash equivalents provided by (used in):Operations:Net earnings for the period$23,956$44,611$14,373$15,311Depreciation of property, plant and equipment11,67211,9593,1062,878Amortization of intangible assets13,59815,9823,3643,728Future income taxes(4,279)(1,942)(1,857)(176)Stock-based compensation expense2,4792,350761558Loss on sale of property, plant and equipment726492279133Other (income) charges(3,416)399(734)-Change in non-cash pension liabilities3251,309399736Change in non-cash operating working capital(36,687)(7,037)(3,001)(11,845)8,37468,12316,69011,323Financing:Dividends to shareholders(11,197)(2,062)(2,810)(2,062)Issuance of common shares on exercise of options3,2736,9012103,506Repurchase of shares-(17,722)--Receipt of acquired lease receivables1,5053,606349743Payment of loan to Seller(1,505)(3,606)(349)(743)Payment of loans payable(14,948)(22,821)(74)(79)(22,872)(35,704)(2,674)1,365Investing:Maturity of short-term investments3,199-131-Purchase of short-term investments(4,044)(3,038)(4,044)-Interest received from long-term investment18493676Proceeds on disposal of property, plant and equipment432834(13)Purchase of property, plant and equipment(11,193)(11,914)(3,160)(4,059)Purchase of intangible assets(1,413)(1,740)(356)(632)Business acquisition, net of cash acquired-2,663--Disposition, net of cash3,649---(9,741)(13,508)(7,389)(4,628)Foreign exchange on cash held in foreign currency1,347(2,952)2,1053,628Increase (decrease) in cash and cash equivalents(22,892)15,9598,73211,688Cash and cash equivalents, beginning of period113,59697,63781,972101,908Cash and cash equivalents, end of period$90,704$113,596$90,704$113,596The interim consolidated financial statements for the twelve months and three months ended December 31, 2010 have not been reviewed by an auditor.AASTRA TECHNOLOGIES LIMITEDCONSOLIDATED BALANCE SHEETS (UNAUDITED)Stated in thousands of Canadian dollarsDECEMBER 31st 2010DECEMBER 31st 2009ASSETSCurrent assets:Cash and cash equivalents$90,704$113,596Short-term investments4,1533,309Accounts receivable183,977175,331Income taxes receivable5,2255,986Inventories115,37481,398Net investment in leases17,42611,831Acquired lease receivables7141,544Prepaid expenses and other assets7,2797,088Future income tax assets6,7326,395431,584406,478Long-term investment5,2514,525Future income tax assets4,4873,901Net investment in leases24,32428,597Acquired lease receivables6071,597Property, plant and equipment37,53441,920Goodwill46,32146,391Intangible assets36,39151,460Other assets625611$587,124$585,480LIABILITIES AND SHAREHOLDERS' EQUITYCurrent liabilities:Accounts payable and accrued liabilities$166,642$148,076Income taxes payable29,46733,294Deferred revenue25,43723,686Current portion of loans payable15,74016,490Future income tax liabilities480961237,766222,507Pensions21,27025,488Loans payable65816,561Future income tax liabilities11,33614,281Other long-term liabilities2,6043,802273,634282,639 Shareholders' equity:Share capital94,65390,488Contributed surplus9,0527,465Accumulated other comprehensive (loss) income(13,318)(5,456)Retained earnings223,103210,344313,490302,841$587,124$585,480The interim consolidated financial statements for the twelve months and three months ended December 31, 2010 have not been reviewed by an auditor.AASTRA TECHNOLOGIES LIMITEDCONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME (UNAUDITED)Stated in thousands of Canadian dollars, except share amountsCommon Shares Share Capital Contributed Surplus Accumulated Other Comprehensive Income (Loss) Retained Earnings Total Comprehensive Income (Loss)Balance, December 31, 200913,852,335$90,488$7,465$(5,456)$210,344$302,841$-Dividends----(8,387)(8,387)-Shares issued on exercise of options182,0503,063---3,063-Stock-based compensation--1,718--1,718-Translation of self-sustaining operations---(813)-(813)(813)Net earnings----9,5839,5839,583Balance, September 30, 201014,034,385$93,551$9,183$(6,269)$211,540$308,005$8,770Dividends----(2,810)(2,810)-Shares issued on exercise of options20,000210---210-Stock-based compensation--761--761-Transfer from contributed surplus to share capital-892(892)----Translation of self-sustaining operations---(7,049)-(7,049)(7,049)Net earnings----14,37314,37314,373Balance, December 31, 201014,054,385$94,653$9,052$(13,318)$223,103$313,490$16,094Common SharesShare CapitalContributed SurplusAccumulated Other Comprehensive Income (Loss)Retained EarningsTotalComprehensive Income (Loss)Balance, December 31, 200814,765,573$90,951$6,484$19,588$176,784$293,807$-Shares issued on exercise of options326,8753,395---3,395-Stock-based compensation--1,792--1,792-Shares repurchased for cancellation(1,417,738)(8,733)--(8,989)(17,722)-Translation of self-sustaining operations---(19,006)-(19,006)(19,006)Net earnings----29,30029,30029,300Balance, September 30, 200913,674,710$85,613$8,276$582$197,095$291,566$10,294Dividends----(2,062)(2,062)-Shares issued on exercise of options177,6253,506---3,506-Stock-based compensation--558--558-Transfer from contributed surplus to share capital-1,369(1,369)----Translation of self-sustaining operations---(6,038)-(6,038)(6,038)Net earnings----15,31115,31115,311Balance, December 31, 200913,852,335$90,488$7,465$(5,456)$210,344$302,841$19,567The interim consolidated financial statements for the twelve months and three months ended December 31, 2010 have not been reviewed by an auditor.FOR FURTHER INFORMATION PLEASE CONTACT: Allan BrettAastra Technologies LimitedCFO(905) 760-4200investors@aastra.com