TORONTO, ONTARIO — (Marketwire) — 07/20/11 — Aastra Technologies Limited – (TSX: AAH) today reported its unaudited financial results for the second quarter ended June 30, 2011. Note that certain 2010 numbers have been restated to comply with the new IFRS accounting rules for Canadian companies adopted by Aastra on January 1, 2011.
Sales for the three months ended June 30, 2011 were $174.1 million compared to $170.3 million for the same quarter in 2010, an increase of approximately 2.2%, primarily as a result of foreign exchange rates.
Gross margin decreased to 41.6% of sales in the second quarter of 2011 compared to 43.8% of sales in the same period in 2010. The decrease in gross margin was a result of several factors including negative foreign exchange impacts, higher inventory provisions and continued pricing pressure across several geographic markets.
Research and development (“R&D”) expenses in the second quarter of 2011 were $15.8 million or 9.1% of sales, compared to $16.6 million or 9.7% of sales in the same quarter of 2010. Excluding the impact of foreign exchange, R&D expenses decreased approximately 13.8%. The decrease was primarily due to continued efficiencies in our cost structure.
Selling, general and administrative (“SG&A”) expenses were $45.9 million or 26.4% of sales in the second quarter of 2011 compared to $45.1 million or 26.5% of sales in the second quarter of 2010. Excluding the impact of foreign exchange, SG&A expenses decreased approximately 4.8% from the same period last year, as a result of restructuring that took place in previous quarters.
Foreign exchange gain of $0.3 million was recognized in the second quarter of 2011 due to the strengthening of the Euro and Swiss franc against the Canadian dollar. This is compared to a foreign exchange loss of $1.6 million in quarter two of 2010. Amortization expense recorded in operating expenses decreased to $5.0 million in the second quarter of 2011 compared to $5.3 million in the second quarter of 2010.
The Company recorded finance expense of $0.1 million in the second quarter of 2011 compared to $0.2 million in the second quarter of 2010. The Company repaid the balance of the term loan in the amount of $15.3 million or 100.0 million Swedish kronor in the second quarter of 2011.
Finance income of $1.2 million was recorded in the second quarter of 2011 compared to $0.6 million in the same quarter in 2010. The Company recorded a fair value adjustment gain of $0.4 million on the long term investment in the second quarter of 2011. No fair value adjustment was recognized in the second quarter of 2010.
As a result of the above, profit increased in the second quarter of 2011 to $6.1 million or $0.43 diluted earnings per share compared to $5.1 million or $0.36 diluted earnings per share in the same period in 2010.
Cash and short-term investments totaled $77.5 million at the end of June 2011 compared to $94.9 million at December 31, 2010. During the second quarter of 2011, the Company generated $12.1 million of cash flow from operations. Accounts receivable decreased by $20.2 million since December 31, 2010 and $7.9 million since March 31, 2011 to $163.8 million. Inventory decreased by $0.4 million since December 31, 2010 and $7.0 million since March 31, 2011 to $114.9 million. In addition, the Company used $2.8 million to pay dividends to shareholders.
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 August 24, 2011 to all shareholders of record on August 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 .
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 , 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.
The interim consolidated financial statements for the six months and three months ended June 30, 2011 and 2010 have not been reviewed by an auditor.
The interim consolidated financial statements for the six months and three months ended June 30, 2011 and 2010 have not been reviewed by an auditor.
The interim consolidated financial statements for the six months and three months ended June 30, 2011 and 2010 have not been reviewed by an auditor.
Contacts:
Aastra Technologies Limited
Investor Relations
(905) 760-4200
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