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Press release from Marketwire

Aastra Reports First Quarter Financial Results

Wednesday, April 18, 2012

Aastra Reports First Quarter Financial Results17:01 EDT Wednesday, April 18, 2012TORONTO, ONTARIO--(Marketwire - April 18, 2012) - Aastra Technologies Limited - (TSX:AAH) today reported its unaudited financial results for the first quarter ended March 31, 2012. Revenue for the three months ended March 31, 2012 was $147.3 million compared to $162.7 million for the same quarter in 2011, a decrease of approximately 9.5%. Excluding the impact of foreign exchange, revenue dropped approximately 8.1% from the same period last year. Revenue decreases were experienced across most geographical markets including Western Europe where the majority of the Company's revenue is generated. Gross margin increased to 43.4% of revenue in the first quarter of 2012 compared to 42.5% of revenue in the same period in 2011 due to the higher margin earned on software applications and service sales. The Company continues to experience an increase in revenue from software applications and service as a percentage of total revenue and this had a positive impact on gross margins realized during the first quarter of 2012. Research and development expenses in the first quarter of 2012 were $14.9 million or 10.1% of revenue, compared to $17.4 million or 10.7% of revenue in the same quarter of 2011. Selling, general and administrative ("SG&A") expenses were $42.9 million or 29.1% of revenue in the first quarter of 2012 compared to $44.7 million or 27.5% of revenue in the first quarter of 2011. Operating expenses continued to decrease during the first quarter as a result of continued cost control and efficiencies across most markets. Foreign exchange losses of $0.7 million were recognized in the first quarter of 2012 mainly as a result of a continued weakness in the Euro. Amortization expense recorded in operating expenses decreased to $4.3 million in the first quarter of 2012 compared to $5.5 million in the first quarter of 2011 as certain intangible assets acquired in previous years have become fully amortized. The Company recorded net finance income of $1.2 million in the first quarter of 2012 compared to $0.6 million in the same period in 2011. Income tax expense of $0.4 million or 16.9% of pre-tax profit compared to 19.7% of pre-tax profit in the first quarter last year. As a result of the above, profit increased in the first quarter this year to $2.0 million or $0.14 diluted earnings per share compared to $0.2 million or $0.01 diluted earnings per share in the same period in 2011. Cash and short-term investments totaled $158.2 million at the end of March 2012 compared to $134.1 million at December 31, 2011. During the first quarter of 2012, the Company generated $28.7 million of cash flow in operations. Accounts receivables decreased by $18.0 million as a result of the seasonally weaker sales value. In addition, inventory decreased by an additional $3.6 million and finance lease receivables decreased by $2.6 million. The Company also returned $2.8 million in dividends to shareholders during the first quarter. As previously announced, subsequent to the close of the first quarter, the Company has completed a substantial issuer bid ("SIB") wherein it repurchased approximately 2.2 million of its own common shares at $23.00 per share for a total cost of $50 million. The SIB was funded from existing cash balances. Finally, 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, 2012 to all shareholders of record on May 3, 2012. 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 PROFIT (UNAUDITED)Stated in thousands of Canadian dollars, except per share amounts1st QUARTER Three months ended March 31st20122011Revenue$147,270$162,706Cost of sales83,32993,60663,94169,100Expenses:Selling, general and administrative42,92844,728Research and development14,88417,399Depreciation and amortization4,2835,508Foreign exchange loss7321,882Results from operating activities1,114(417)Finance income(1,293)(818)Finance expense46172Profit before income taxes2,361229Income taxes39845Profit for the period$1,963$184Earnings per share:Basic$0.14$0.01Diluted$0.14$0.01* Actual common shares outstanding as at March 31, 2012 - 14,033,985 (2011 - 14,074,385)**Weighted average common shares outstanding for the three months ended March 31, 2012 - 14,032,735 (2011 - 14,064,385)*** Weighted average fully diluted common shares outstanding for the three months ended March 31, 2012 - 14,129,855 (2011 - 14,139,683)The interim consolidated financial statements for the three months ended March 31, 2012 and 2011 have not been reviewed by an auditor.AASTRA TECHNOLOGIES LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)Stated in thousands of Canadian dollars1st QUARTER Three months ended March 31st2012 2011Cash and cash equivalents provided by (used in):Operating activities:Profit for the period$1,963$184Depreciation of property, plant and equipment2,4772,873Amortization of intangible assets2,6933,639Share-based compensation expense338457Loss on sale of property, plant and equipment265-Finance income(1,293)(818)Finance expense46172Income tax expense39845Change in non-cash pension liabilities(30)629Change in non-cash operating working capital22,089(12,379)Income taxes paid(237)(4,291)28,709(9,489)Investing activities:Interest received856718Proceeds from disposal of property, plant and equipment7-Purchase of property, plant and equipment(825)(583)Purchase of intangible assets(139)(20)Business acquisition, net of cash acquired(2,675)-(2,776)115Financing activities:Dividends paid to shareholders(2,806)(2,814)Proceeds from exercise of share options38251Receipt of acquired lease receivables120187Payment of acquired loan payable(120)(187)Repayment of loans payable(37)(74)Finance costs paid(34)(162)(2,839)(2,799)Foreign exchange on cash held in foreign currency1,074567Increase (decrease) in cash and cash equivalents24,168(11,606)Cash and cash equivalents, beginning of period129,93390,704Cash and cash equivalents, end of period$154,101$79,098The interim consolidated financial statements for the three months ended March 31, 2012 and 2011 have not been reviewed by an auditor.AASTRA TECHNOLOGIES LIMITEDCONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)Stated in thousands of Canadian dollarsMARCH 31st 2012 DECEMBER 31st 2011 MARCH 31st 2011ASSETSCurrent assets:Cash and cash equivalents$154,101$129,933$79,098Short-term investments4,1034,2024,163Trade and other receivables149,113167,142171,693Current tax assets6,0537,3484,503Inventories77,40680,963121,891Finance lease receivables20,61821,33619,539Acquired lease receivables369462642Prepaid expenses and other assets8,6857,2349,001420,448418,620410,530Long-term investment5,8365,4065,251Deferred tax assets15,03915,81016,957Finance lease receivables21,57123,46926,209Acquired lease receivables114138534Property, plant and equipment29,40530,95336,841Goodwill47,23246,32348,215Intangible assets26,52826,29036,305Other assets500516623$566,673$567,525$581,465LIABILITIES AND EQUITYCurrent liabilities:Trade and other payables$113,657$116,165$130,275Current tax liabilities28,75930,39425,092Deferred income36,44036,22234,890Current portion of loans payable38251216,246Current portion of provisions13,29412,49414,259192,532195,787220,762Pensions38,07437,56625,658Loans payable114138551Provisions2,9832,9653,221Deferred tax liabilities7,3687,85110,420Other liabilities8809951,132241,951245,302261,744Equity:Share capital94,95594,91794,904Contributed surplus10,58510,2479,349Translation reserves(3,193)(6,159)(3,443)Retained earnings222,375223,218218,911324,722322,223319,721$566,673$567,525$581,465The interim consolidated financial statements for the three months ended March 31, 2012 and 2011 have not been reviewed by an auditor.FOR FURTHER INFORMATION PLEASE CONTACT: Investor RelationsAastra Technologies Limited(905) 760-4200investors@aastra.com