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Press release from Marketwire

Aastra Reports First Quarter Financial Results

Wednesday, April 24, 2013

Aastra Reports First Quarter Financial Results

17:01 EDT Wednesday, April 24, 2013

TORONTO, ONTARIO--(Marketwired - April 24, 2013) - Aastra Technologies Limited - (TSX:AAH) today reported its unaudited financial results for the first quarter ended March 31, 2013.

Revenue for the three months ended March 31, 2013 was $133.5 million compared to $147.3 million for the same quarter in 2012, a decrease of approximately 9.3%. Excluding the impact of foreign exchange, revenue dropped approximately 10.4% from the same period last year.

Gross margin decreased to 42.9% of revenue in the first quarter of 2013 compared to 43.4% of revenue in the same period in 2012 due mainly to higher inventory provisions and restructuring costs recognized in the first quarter this year. Gross margins were also negatively impacted by higher overhead ratios. The Company continues to experience an increase in the portion of revenue derived from higher margin products and service; this trend helped partially offset the other negative impacts on gross margins experienced in the first quarter.

Research and development expenses in the first quarter of 2013 were $14.8 million or 11.1% of revenue, compared to $15.0 million or 10.2% of revenue in the same quarter of 2012. Selling, general and administrative ("SG&A") expenses were $40.6 million or 30.4% of revenue in the first quarter of 2013 compared to $43.1 million or 29.2% of revenue in the first quarter of 2012. Operating expenses were lower in the first quarter as a result of continued cost control and efficiencies.

Foreign exchange gain of $0.8 million was recognized in the first quarter of 2013 mainly as a result of the impact of a stronger Euro during the three months ended March 31, 2013. Amortization expense recorded in operating expenses decreased to $3.8 million in the first quarter of 2013 compared to $4.3 million in the first quarter of 2012 as certain intangible assets acquired in previous years have become fully amortized.

The Company recorded net finance income of $1.1 million in the first quarter of 2013 compared to $1.2 million in the same period in 2012. Income tax expense of $0.02 million or 18.3% of pre-tax profit compared to 17.7% of pre-tax profit in the first quarter last year.

As a result of the above, profit decreased in the first quarter this year to $0.1 million or $0.01 diluted earnings per share compared to $1.7 million or $0.12 diluted earnings per share in the same period in 2012.

Cash and short-term investments totaled $117.8 million at the end of March 2013 compared to $107.4 million at December 31, 2012. During the first quarter of 2013, the Company generated $13.9 million of cash flow in operations. Accounts receivables decreased by $27.9 million as a result of the seasonally weaker sales value. In addition, inventory decreased by an additional $0.9 million and finance lease receivables decreased by $2.8 million. The Company also returned $2.3 million in dividends to shareholders during the first quarter.

The Company is pleased to announce that it will pay a dividend to its shareholders of $0.20 per share for this quarter, payable on May 21, 2013 to all shareholders of record on May 7, 2013. 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 LIMITED
CONSOLIDATED STATEMENTS OF PROFIT (UNAUDITED )
Stated in thousands of Canadian dollars, except per share amounts
1st QUARTER
Three months
ended March 31st
2013 20121
Revenue $ 133,512 $ 147,270
Cost of sales 76,170 83,417
57,342 63,853
Expenses:
Selling, general and administrative 40,596 43,059
Research and development 14,761 14,975
Depreciation and amortization 3,750 4,283
Foreign exchange (gain) loss (800 ) 732
Results from operating activities (965 ) 804
Finance income (1,141 ) (1,293 )
Finance expense 72 46
Profit before income taxes 104 2,051
Income taxes 19 364
Profit for the period $ 85 $ 1,687
Earnings per share:
Basic $ 0.01 $ 0.12
Diluted $ 0.01 $ 0.12
* Actual common shares outstanding as at March 31, 2013 - 11,552,864 (2012 - 14,033,985)
** Weighted average common shares outstanding for the three months ended March 31, 2013 - 11,540,989 (2012 - 14,032,735)
*** Weighted average fully diluted common shares outstanding for the three months ended March 31, 2013 - 11,641,768 (2012 - 14,129,855)

The interim consolidated financial statements for the three months ended March 31, 2013 and 2012 have not been reviewed by an auditor.

1Restated to reflect changes resulting from the retrospective application of the amendments to accounting standard IAS 19 (Revised), Employee Benefits.

AASTRA TECHNOLOGIES LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED )
Stated in thousands of Canadian dollars
1st QUARTER
Three months
ended March 31st
2013 20121
Cash and cash equivalents provided by (used in):
Operating activities:
Profit for the period $ 85 $ 1,687
Depreciation of property, plant and equipment 2,251 2,477
Amortization of intangible assets 2,268 2,693
Share-based compensation expense 160 338
Loss on sale of property, plant and equipment 233 265
Finance income (1,141 ) (1,293 )
Finance expense 72 46
Income tax expense 19 364
Change in non-cash pension liabilities 343 280
Change in non-cash operating working capital 12,247 22,089
Income taxes (paid) received (2,663 ) (237 )
13,874 28,709
Investing activities:
Maturity of short-term investments 3,424 -
Interest received 600 856
Proceeds from disposal of property, plant and equipment 12 7
Purchase of property, plant and equipment (1,301 ) (825 )
Purchase of intangible assets (110 ) (139 )
Business acquisition, net of cash acquired 161 (2,675 )
Change in non-cash investing working capital (83 ) -
2,703 (2,776 )
Financing activities:
Dividends paid to shareholders (2,309 ) (2,806 )
Proceeds from exercise of share options 333 38
Receipt of acquired lease receivables 33 120
Payment of acquired loan payable (33 ) (120 )
Repayment of loans payable - (37 )
Finance costs paid (48 ) (34 )
(2,024 ) (2,839 )
Foreign exchange on cash held in foreign currency (695 ) 1,074
Increase (decrease) in cash and cash equivalents 13,858 24,168
Cash and cash equivalents, beginning of period 100,965 129,933
Cash and cash equivalents, end of period $ 114,823 $ 154,101

The interim consolidated financial statements for the three months ended March 31, 2013 and 2012 have not been reviewed by an auditor.

1Restated to reflect changes resulting from the retrospective application of the amendments to accounting standard IAS 19 (Revised), Employee Benefits.


AASTRA TECHNOLOGIES LIMITED
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED )
Stated in thousands of Canadian dollars
MARCH 31 st 2013 DECEMBER 31st 20121 JANUARY 1st 20121
ASSETS
Current assets:
Cash and cash equivalents $ 114,823 $ 100,965 $ 129,933
Short-term investments 3,009 6,433 4,202
Trade and other receivables 131,402 159,260 167,142
Current tax assets 7,602 7,296 7,348
Inventories 90,952 91,804 80,963
Finance lease receivables 12,818 14,052 21,336
Acquired lease receivables 112 123 462
Prepaid expenses and other assets 7,756 7,106 7,234
368,474 387,039 418,620
Long-term investment 6,628 6,278 5,406
Deferred tax assets 15,483 15,428 14,898
Finance lease receivables 17,857 19,375 23,469
Acquired lease receivables 65 88 138
Property, plant and equipment 26,034 26,754 30,953
Goodwill 49,273 48,294 46,323
Intangible assets 18,827 20,620 26,290
Other assets 81 92 516
$ 502,722 $ 523,968 $ 566,613
LIABILITIES AND EQUITY
Current liabilities:
Trade and other payables $ 99,049 $ 121,121 $ 116,165
Current tax liabilities 9,172 11,478 30,394
Deferred income 38,679 35,209 36,222
Current portion of loans payable 112 123 512
Current portion of provisions 14,945 14,330 12,494
161,957 182,261 195,787
Pensions 34,043 33,959 33,427
Loans payable 65 88 138
Provisions 3,151 2,844 2,965
Deferred tax liabilities 8,484 8,875 7,851
Other liabilities 1,250 894 995
208,950 228,921 241,163
Equity:
Share capital 78,192 77,859 94,917
Contributed surplus 11,322 11,162 10,247
Translation reserves (4,350 ) (4,806 ) (6,234 )
Retained earnings 208,608 210,832 226,520
293,772 295,047 325,450
$ 502,722 $ 523,968 $ 566,613

The interim consolidated financial statements for the three months ended March 31, 2013 and 2012 have not been reviewed by an auditor.

1Restated to reflect changes resulting from the retrospective application of the amendments to accounting standard IAS 19 (Revised), Employee Benefits.

FOR FURTHER INFORMATION PLEASE CONTACT:

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

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