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Aastra Reports Fourth Quarter Financial Results


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© Marketwire 2013
2013-02-21 23:07:40 -

TORONTO, ONTARIO -- (Marketwire) -- 02/21/13 -- Aastra Technologies Limited - (TSX:AAH) today reported its unaudited financial results for the fourth quarter ended December 31, 2012.


Revenue for the three months ended December 31, 2012 was $175.2 million compared to $199.7 million for the same quarter in 2011, a decrease of approximately 12.3%. Excluding the impact of foreign exchange, revenue dropped by approximately 7.1% from the same period last year.


Revenue for the year ended December 31, 2012 was $606.6 million compared to $693.0 million for 2011. Excluding the impact of foreign exchange, revenue declined by 7.8% in the twelve months ended December 31, 2012 compared to the same period of 2011.


Gross margin increased to 43.8% of revenue in the fourth quarter of 2012 compared to 43.2% of revenue in the same period in 2011. Gross margin for the year ended December 31, 2012 increased to 43.4% compared to 42.3% for the year in 2011.


Research and development ("R&D") expenses in the fourth quarter of 2012 were $13.4 million or 7.7% of revenue, compared to $14.8 million or 7.4% of revenue in the final quarter of 2011. R&D expenses for the year ended December 31, 2012 decreased to $56.8 million or 9.4% of revenue from $63.2 million or 9.1% of revenue.


Selling, general and administrative ("SG&A") expenses were $44.6 million or 25.5% of revenue in the fourth quarter this year compared to $44.4 million or 22.2% of revenue in the fourth quarter of 2011. SG&A expenses for the year ended December 31, 2012 decreased to $171.7 million or 28.3% of revenue compared to $178.5 million or 25.8% of revenue for the year in 2011.


Foreign exchange losses of $1.1 million were recognized in the fourth quarter of 2012, compared to a foreign exchange loss of $1.3 million in the same period last year. Foreign exchange losses were $3.2 million for the year in 2012 compared to $3.5 million for 2011.


Depreciation and amortization expense recorded in operating expenses decreased to $3.9 million in the quarter compared to $4.9 million in the fourth quarter of 2011 as certain intangible assets acquired in previous years were fully amortized at the end of 2011.


The Company recorded net finance income of $1.4 million in the fourth quarter of 2012 compared to $0.7 million in the same period in 2011. Net finance income for the year in 2012 was $4.7 million compared to $3.3 million for the year in 2011. In 2012, the Company recorded a fair value adjustment gain of $1.8 million on a long-term investment compared to a gain of $0.2 million in 2011.


Despite continued profits before income tax, the Company recorded an income tax recovery of $12.9 million in the fourth quarter of 2012 related to a reduction in current income tax liabilities of $17.1 million as a result of tax years becoming statute barred or settlements being made in certain jurisdictions. Comparatively, income tax expense of $3.4 million or 15.8% of pre-tax profit was recognized in the fourth quarter of 2011. Income tax recovery was $11.9 million for the year in 2012 compared to income tax expense of $4.8 million or 15.5% of pre-tax profit for the year in 2011.


As a result of the above, profit increased in the fourth quarter of 2012 to $28.0 million or $2.42 diluted earnings per share compared to $18.2 million or $1.30 diluted earnings per share in the same period in 2011. Profit for the year ended December 31, 2012 was $32.8 million or $2.60 diluted earnings per share compared to $26.2 million or $1.85 diluted earnings per share in 2011. Despite an ongoing difficult period in our business, this represents the Company's 59th consecutive quarter of profitability.



Cash and short-term investments totaled $107.4 million at the end of 2012 compared to $134.1 million at the end of 2011. During the fourth quarter of 2012, the Company generated $10.6 million of cash flow from operations. For the year, the Company generated $44.0 million of cash flow from operations as a result of continued profitability. In addition, the Company used $56.1 million to repurchase its own common shares, paid $9.9 million in dividends to its common shareholders and invested $6.5 million in property, plant and equipment and intangible assets during 2012.


Finally, 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 March 20, 2013 to all shareholders of record on March 6, 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 www.aastra.com : 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   
                                   2012        2011        2012        2011 
----------------------------------------------------------------------------
Revenue                       $ 606,615   $ 692,994   $ 175,211   $ 199,681 
Cost of sales                   343,173     399,786      98,541     113,335 
----------------------------------------------------------------------------
                                263,442     293,208      76,670      86,346 
Expenses:                                                                   
 Selling, general and                                                       
  administrative                171,745     178,476      44,600      44,369 
 Research and development        56,813      63,160      13,431      14,795 
 Depreciation and                                                           
  amortization                   15,432      20,328       3,903       4,894 
 Foreign exchange loss            3,170       3,521       1,056       1,341 
----------------------------------------------------------------------------
Results from operating                                                      
 activities                      16,282      27,723      13,680      20,947 
Finance income                   (4,882)     (3,600)     (1,522)       (747)
Finance expense                     218         344          78          54 
----------------------------------------------------------------------------
Profit before income taxes       20,946      30,979      15,124      21,640 
Income tax (recovery)                                                       
 expense                        (11,900)      4,807     (12,856)      3,425 
----------------------------------------------------------------------------
Profit for the period         $  32,846   $  26,172   $  27,980   $  18,215 
----------------------------------------------------------------------------
Earnings per share:                                                         
 Basic                        $    2.62   $    1.86   $    2.43   $    1.30 
 Diluted                      $    2.60   $    1.85   $    2.42   $    1.30 
----------------------------------------------------------------------------
                                                                            
(i)    Actual common shares outstanding as at December 31, 2012 - 11,529,114
       (2011 - 14,031,485)                                                  
                                                                            
(ii)   Weighted average common shares outstanding for the twelve months and 
       three months ended December 31, 2012 - 12,530,758 and 11,529,114     
       (2011 - 14,061,422 and 14,032,739)                                   
                                                                            
(iii)  Weighted average fully diluted common shares outstanding for the     
       twelve months and three months ended December 31, 2012 - 12,616,229  
       and 11,583,190 (2011 - 14,155,347 and 14,032,739)                    
                                                                            
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The interim consolidated financial statements for the twelve months and     
three months ended December 31, 2012 and 2011 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   
                                   2012        2011        2012        2011 
----------------------------------------------------------------------------
Cash and cash equivalents                                                   
 provided by (used in):                                                     
Operating activities:                                                       
  Profit for the period       $  32,846   $  26,172   $  27,980   $  18,215 
  Depreciation of property,                                                 
   plant and equipment            9,511      11,402       2,246       2,804 
  Amortization of intangible                                                
   assets                         9,207      13,400       2,430       3,140 
  Share-based compensation                                                  
   expense                          976       1,394          98         285 
  Loss on sale of property,                                                 
   plant and equipment              845       1,130         227         640 
  Finance income                 (4,882)     (3,600)     (1,522)       (747)
  Finance expense                   218         344          78          54 
  Income tax (recovery)                                                     
   expense                      (11,900)      4,807     (12,856)      3,425 
  Change in non-cash pension                                                
   liabilities                     (114)       (766)         24      (1,497)
  Change in non-cash                                                        
   operating working capital     10,812      22,569      (6,435)       (519)
  Income taxes paid              (3,481)     (6,471)     (1,629)     (1,455)
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                                 44,038      70,381      10,641      24,345 
----------------------------------------------------------------------------
Investing activities:                                                       
  Maturity of short-term                                                    
   investments                   18,615       4,092      14,414       4,092 
  Purchase of short-term                                                    
   investments                  (19,922)     (4,092)    (11,009)     (4,092)
  Interest received               3,113       3,523         749       1,064 
  Proceeds from disposal of                                                 
   property, plant and                                                      
   equipment                         58          11           -           3 
  Purchase of property,                                                     
   plant and equipment           (5,803)     (5,102)     (3,218)     (1,200)
  Purchase of intangible                                                    
   assets                          (742)       (821)       (221)       (381)
  Business acquisition, net                                                 
   of cash acquired              (2,675)          -           -           - 
----------------------------------------------------------------------------
                                 (7,356)     (2,389)        715        (514)
----------------------------------------------------------------------------
Financing activities:                                                       
  Dividends paid to                                                         
   shareholders                  (9,850)    (11,258)     (2,306)     (2,814)
  Proceeds from exercise of                                                 
   share options                    215         851           -         600 
  Repurchase of shares,                                                     
   including transaction                                                    
   costs                        (56,103)     (1,359)          -      (1,359)
  Receipt of acquired lease                                                 
   receivables                      378         740          62         162 
  Payment of acquired loan                                                  
   payable                         (378)       (740)        (62)       (162)
  Increase in loans payable           -         300           -           - 
  Repayment of loans payable        (49)    (15,894)          -         (39)
  Finance costs paid               (137)       (314)        (34)        (37)
----------------------------------------------------------------------------
                                (65,924)    (27,674)     (2,340)     (3,649)
----------------------------------------------------------------------------
Foreign exchange on cash                                                    
 held in foreign currency           274      (1,089)      2,008      (4,519)
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Increase (decrease) in cash                                                 
 and cash equivalents           (28,968)     39,229      11,024      15,663 
Cash and cash equivalents,                                                  
 beginning of period            129,933      90,704      89,941     114,270 
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Cash and cash equivalents,                                                  
 end of period                $ 100,965   $ 129,933   $ 100,965   $ 129,933 
----------------------------------------------------------------------------
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The interim consolidated financial statements for the twelve months and     
three months ended December 31, 2012 and 2011 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 31st    DECEMBER 31st 
                                                      2012             2011 
----------------------------------------------------------------------------
ASSETS                                                                      
Current assets:                                                             
  Cash and cash equivalents                   $    100,965     $    129,933 
  Short-term investments                             6,433            4,202 
  Trade and other receivables                      159,260          167,142 
  Current tax assets                                 7,296            7,348 
  Inventories                                       91,804           80,963 
  Finance lease receivables                         14,052           21,336 
  Acquired lease receivables                           123              462 
  Prepaid expenses and other assets                  7,106            7,234 
----------------------------------------------------------------------------
                                                   387,039          418,620 
                                                                            
Long-term investment                                 6,278            5,406 
Deferred tax assets                                 16,297           15,810 
Finance lease receivables                           19,375           23,469 
Acquired lease receivables                              88              138 
Property, plant and equipment                       26,754           30,953 
Goodwill                                            48,294           46,323 
Intangible assets                                   20,620           26,290 
Other assets                                            92              516 
----------------------------------------------------------------------------
                                              $    524,837     $    567,525 
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LIABILITIES AND EQUITY                                                      
Current liabilities:                                                        
  Trade and other payables                    $    121,121     $    116,165 
  Current tax liabilities                           11,478           30,394 
  Deferred income                                   35,209           36,222 
  Current portion of loans payable                     123              512 
  Current portion of provisions                     14,330           12,494 
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                                                   182,261          195,787 
                                                                            
Pensions                                            37,731           37,566 
Loans payable                                           88              138 
Provisions                                           2,844            2,965 
Deferred tax liabilities                             8,875            7,851 
Other liabilities                                      894              995 
----------------------------------------------------------------------------
                                                   232,693          245,302 
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Equity:                                                                     
  Share capital                                     77,859           94,917 
  Contributed surplus                               11,162           10,247 
  Translation reserves                              (4,726)          (6,159)
  Retained earnings                                207,849          223,218 
----------------------------------------------------------------------------
                                                   292,144          322,223 
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                                              $    524,837     $    567,525 
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The interim consolidated financial statements for the twelve months and     
three months ended December 31, 2012 and 2011 have not been reviewed by an  
auditor.                                                                    




Contacts:

Aastra Technologies Limited

Investor Relations

(905) 760-4200
investors@aastra.com :

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