Aastra Reports Second Quarter Financial Results 2012
TORONTO, ONTARIO (Marketwire - July 17, 2012) -- Aastra Technologies Limited - (TSX: “AAH”) today reported its unaudited financial results for the second quarter ended June 30, 2012.
Revenue for the three months ended June 30, 2012 was $147.1 million compared to $174.1 million for the same quarter in 2011, a decrease of approximately 15.5%. Excluding the impact of foreign exchange, revenue dropped approximately 10.9% 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. Revenue for the six months ended June 30, 2012 was $294.3 million compared to $336.8 million in the same period last year, a decrease of 12.6%. Again, excluding foreign exchange, revenue decreased by 9.6% over the same period last year. The impact of the economic weakness in Europe has clearly had a significant negative impact on our revenue in the first half of 2012.
Gross margin increased to 44.2% of revenue in the second quarter of 2012 compared to 41.6% of revenue in the same period in 2011 partly due to reduced price discounting. In addition, 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 second quarter of 2012.
Research and development expenses in the second quarter of 2012 were $15.0 million or 10.2% of revenue, compared to $15.8 million or 9.1% of revenue in the same quarter of 2011. Selling, general and administrative (“SG&A”) expenses were $44.4 million or 30.2% of revenue in the second quarter of 2012 compared to $45.9 million or 26.4% of revenue in the second quarter of 2011. Operating expenses decreased slightly compared to last year as a result of the impact in foreign exchange rates on our European expenditures. This decrease was partially offset by an increase in bad debt expense and higher restructuring costs incurred in the second quarter this year.
Foreign exchange losses of $0.7 million were recognized in the second quarter of 2012, mainly as a result of a continued weakness in the Euro, compared to a foreign exchange gain of $0.3 million in the same period last year. Amortization expense recorded in operating expenses decreased to $3.6 million in the second quarter of 2012 compared to $5.0 million in the second quarter of 2011 as certain intangible assets acquired in previous years have become fully amortized.
The Company recorded net finance income of $1.0 million in the second quarter of 2012 compared to $1.1 million in the same period in 2011. Income tax expense was $0.4 million or 16.8% of pre-tax profit compared to $1.1 million or 15.0% of pre-tax profit in the second quarter last year.
As a result of the above, profit decreased in the second quarter this year to $1.9 million or $0.15 diluted earnings per share compared to $6.1 million or $0.43 diluted earnings per share in the same period in 2011. Profit for the six months ended June 30, 2012 was $3.9 million or $0.29 diluted earnings per share compared to $6.3 million or $0.44 diluted earnings per share in the first half of 2011. Despite a challenging climate in our largest geographic segment, this represents the Company’s 57th consecutive quarter of profitability.
Cash and short-term investments totaled $95.5 million at the end of June 2012 compared to $134.1 million at December 31, 2011 and $158.2 million at the end of March 2012. During the second quarter, the Company used $7.3 million of cash flow in operations. Accounts payable decreased by $10.1 million as a result of lower labour liabilities and supplier payables; while partially offsetting this accounts receivable decreased by $2.6 million. Both balances were also impacted by lower exchange rates on Euro denominated receivables and payables at the end of the second quarter. In addition, inventory increased by an additional $4.3 million while finance lease receivables decreased by $4.6 million.
During the second quarter, the Company used $51.4 million to repurchase approximately 2.2 million of its common shares through its substantial issuer bid and Normal Course Issuer Bid while also paying $2.4 million in dividends to shareholders.
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 August 22, 2012 to all shareholders of record on August 1, 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.
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