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Press release from Marketwire

Aastra Reports First Quarter Financial Results

Wednesday, April 27, 2011

Aastra Reports First Quarter Financial Results18:01 EDT Wednesday, April 27, 2011TORONTO, ONTARIO--(Marketwire - April 27, 2011) - Aastra Technologies Limited - (TSX:AAH) today reported its unaudited financial results for the first quarter ended March 31, 2011. Note that certain 2010 numbers have been restated to comply with the new IFRS accounting rules for Canadian companies adopted by Aastra this quarter.Sales for the three months ended March 31, 2011 were $162.7 million compared to $171.1 million for the same quarter in 2010, a decrease of approximately 4.9%. The Company continued to experience a drop in revenue from the strength in the Canadian dollar when compared to the Euro and U.S. dollar. Excluding the impact of foreign exchange, sales dropped approximately 1.8% from the same period last year. Gross margin decreased to 42.5% of sales in the first quarter of 2011 compared to 43.9% of sales in the same period in 2010. The decrease in gross margin was a result of the combined effect of higher inventory provisions and lower material margins in the first quarter this year compared to last year.Research and development expenses in the first quarter of 2011 were $17.4 million or 10.7% of sales, compared to $18.5 million or 10.8% of sales in the same quarter of 2010. The decrease was primarily due to continued efficiencies in our cost structure.Selling, general and administrative ("SG&A") expenses were $44.7 million or 27.5% of sales in the first quarter of 2011 compared to $45.6 million or 26.6% of sales in the first quarter of 2010. SG&A expenses decreased as a result of the impact of foreign exchange. Foreign exchange losses of $1.9 million were recognized in the first quarter of 2011 mainly as a result of a continued weakness in the Euro and U.S. dollar. Amortization expense recorded in operating expenses decreased to $5.5 million in the first quarter of 2011 compared to $5.8 million in the first quarter of 2010.The Company recorded finance expense of $0.2 million and finance income of $0.8 million in the first quarter of each 2011 and 2010. In addition, the Company recorded a gain of $2.7 million on the sale of a non-core product line during the first quarter of 2010. As a result of the above, profit decreased in the first quarter in 2011 to $0.2 million or $0.01 diluted earnings per share compared to $4.1 million or $0.29 diluted earnings per share in the same period in 2010. Cash and short-term investments totaled $83.3 million at the end of March 2011 compared to $94.9 million at December 31, 2010. During the first quarter of 2011, the Company used $9.5 million of cash flow in operations. Accounts payable decreased $12.8 million as annual compensation plans were paid out during the quarter and inventory increased by $6.5 million as previous purchase commitments were taken in during the quarter. In addition, the Company used $2.8 million to pay dividends to shareholders. 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, 2011 to all shareholders of record on May 3, 2011. 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 INCOME STATEMENTS (UNAUDITED)Stated in thousands of Canadian dollars, except per share amounts1st QUARTER Three months ended March 31st20112010Revenue$162,706$171,065Cost of sales93,60695,89569,10075,170Expenses (income):Selling, general and administrative44,72845,576Research and development17,39918,502Depreciation and amortization5,5085,765Foreign exchange loss1,8824,077Other income-(2,682)Results from operating activities(417)3,932Finance income(818)(796)Finance expense172161Profit before income taxes2294,567Income taxes45451Profit for the period$184$4,116Earnings per share:Basic$0.01$0.30Diluted$0.01$0.29*Actual common shares outstanding as at March 31, 2011 – 14,074,385 (2010 – 13,956,885)**Weighted average common shares outstanding for the three months ended March 31, 2011 – 14,064,385 (2010 – 13,905,772)***Weighted average fully diluted common shares outstanding for the three months ended March 31, 2011 – 14,139,683 (2010 – 14,145,546)The interim consolidated financial statements for the three months ended March 31, 2011 have not been reviewed by an auditor.AASTRA TECHNOLOGIES LIMITEDCONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)Stated in thousands of Canadian dollars1st QUARTER Three months ended March 31st20112010Cash and cash equivalents provided by (used in):Operating activities:Profit for the period$184$4,116Depreciation of property, plant and equipment2,8733,057Amortization of intangible assets3,6393,845Share-based compensation expense476371Loss on sale of property, plant and equipment-131Other income-(2,682)Finance income(818)(796)Finance expenses172161Income tax expense45451Change in non-cash pension liabilities629241Change in non-cash operating working capital(12,398)1,040Income taxes paid(4,291)(2,575)(9,489)7,360Investing activities:Maturity of short-term investments-3,063Interest received718659Purchase of property, plant and equipment(583)(2,891)Purchase of intangible assets(20)(220)Disposition, net of cash-3,649Changes in non-cash investing working capital-2011154,461Financing activities:Dividends paid to shareholders(2,814)(2,787)Proceeds from exercise of share options2512,216Receipt of acquired lease receivables187430Payment of acquired loan payable(187)(430)Repayment of loans payable(74)(7,124)Finance costs paid(162)(174)(2,799)(7,869)Foreign exchange on cash held in foreign currency567995Increase (decrease) in cash and cash equivalents(11,606)4,947Cash and cash equivalents, beginning of period90,704113,596Cash and cash equivalents, end of period$79,098$118,543The interim consolidated financial statements for the three months ended March 31, 2011 have not been reviewed by an auditor.AASTRA TECHNOLOGIES LIMITEDCONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)Stated in thousands of Canadian dollarsMARCH 31st 2011DECEMBER 31st 2010JANUARY 1st 2010ASSETSCurrent assets:Cash and cash equivalents$79,098$90,704$113,596Short-term investments4,1634,1533,309Trade and other receivables171,693183,977175,082Current tax assets4,5035,2255,986Inventories121,891115,37481,398Finance lease receivables19,53917,42611,831Acquired lease receivables6427141,544Prepaid expenses and other assets9,0017,2797,088410,530424,852399,834Long-term investment5,2515,2514,525Deferred tax assets16,95714,01513,230Finance lease receivables26,20924,32428,597Acquired lease receivables5346071,597Property, plant and equipment36,84137,51041,918Goodwill48,21546,32146,391Intangible assets36,30538,48953,965Other assets623625611$581,465$591,994$590,668LIABILITIES AND EQUITYCurrent liabilities:Trade and other payables$130,275$143,043$122,745Current tax liabilities25,09229,46733,294Deferred income34,89033,52431,741Current portion of loans payable16,24615,74016,490Current portion of provisions14,25914,06516,447220,762235,839220,717Pensions25,65824,30531,332Loans payable55165816,561Provisions3,2212,9703,512Deferred tax liabilities10,42010,49313,735Other liabilities1,1321,1541,481261,744275,419287,338 Equity:Share capital94,90494,65390,488Contributed surplus9,3498,8928,030Translation reserves(3,443)(8,511)-Retained earnings218,911221,541204,812319,721316,575303,330$581,465$591,994$590,668The interim consolidated financial statements for the three months ended March 31, 2011 have not been reviewed by an auditor.FOR FURTHER INFORMATION PLEASE CONTACT: Investor RelationsAastra Technologies Limited(905) 760-4200investors@aastra.com