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Option reports First Half Year 2011 results

08.2011 – Option N.V. (EURONEXT Brussels: OPTI; OTC: OPNVY), the wireless technology company, today announced its results for the first half fiscal year ended June 30, 2011. The financial information reported in this release is presented in Euros and has been prepared in accordance with the recognition and measurement criteria of IFRS as adopted by the European Union. The accounting policies and methods of computation followed in the attached financial statements are the same as those followed in the most recent annual financial statements. The company released its IAS 34 interim financial statements.
Business Update: Option acquires assets from MobiWire
Together with the first half year results and as an event shortly after the reporting period, the Group today announced the acquisition of the Connected Consumer Electronics assets of MobiWire S.A. These assets include Surface UXTM software, related IP, and a core team of user experience experts. Surface UXTM is an Android user interface (UI) overlay for smartphones and tablets that provides simplified access to aggregated cloud-based content and services. Surface UX has its own home-screen structure, status bar, main menu and a series of patented -Service Apps- which make up the overlay. This creates a clear added value for the user by making the interface easy to use straight out of the box.
The acquisition is a further step in Option-s transition from a supplier of commoditized products to wireless solutions combining software, services, hardware while improving end-user convenience and user experience.
As part of this agreement, Jerome Nadel joined Options Executive Management Team as Chief Experience Officer. He has formerly held executive user experience and marketing positions at IBM, Unisys, Human Factors International, Gemplus, and most recently MobiWire. The team of user experience experts will be based in Paris and the Company will operate under the name of “Option France SAS” (Société Anonyme Simplifiée) which was established.
Financial Highlights of the first half fiscal year 2011
– Total revenues for the first half year of 2011 were EUR 25.8 million compared with EUR 30.9 million realized in the first half year of 2010. Product related revenues decreased from EUR 30.7 million in the first half year of 2010 to EUR 11.6 million in the same period of 2011, whilst software and license revenues increased from EUR 0.2 million in first half year 2010 to EUR 14.3 million in the same period of 2011. Those 2011 license revenues were mainly the result of the existing license agreement between the Group and Huawei Technologies.
– Gross margin for the first half year was 54.6 % on total revenues compared with gross margin of 18.4% for the first half year 2010. The 2011 half year gross margin was positively impacted by the increased software and license revenues, delivering higher margins compared to revenues generated by devices and negatively impacted by additional provisions for obsolete inventories linked to the phase out of the not longer strategic relevant product portfolio.
– Compared to the first half year 2010, operating expenses decreased with EUR 9.1 million from EUR 26.7 million to EUR 17.6 million. Compared to the first half year of 2010, the Research and Development expenses decreased by EUR 10 million. The main reason of this decrease is an impairment booked on intangible assets of EUR 6.2 million in the first half year of 2010. In the first half year 2011, the Group reviewed the existing capitalized development projects but this review has not led to impairments on intangible assets. The remaining part, being EUR 3.8 million is explained by lower depreciations and amortizations and reduced expenses, resulting from the 2009 cost reductions. As well, compared to the first half year of 2010, the Sales Marketing and royalties expenses increased by EUR 1.7 million. The main reason of this increase is that in the first half year of 2010, Option NV and one of its licensors entered into a commercial agreement. As a result, the Group reversed a provision for the arbitration of EUR 3.9 million. Excluding the afore mentioned one-off event, Sales Marketing and Royalty expenses decreased mainly as a result of a decrease in product revenues as well as reduced expenses as a result of the cost reductions initiated in 2009.
– The Group reports a positive EBITDA of EUR 1.1 million for the first six months of 2011 compared with a negative EBITDA of EUR – 6.5 million in the same period 2011.
– The 2011 half year EBIT amounted to EUR -3.5 million or -13.4% on total revenues compared with EUR -21.0 million or -68.2% during the corresponding period in 2010.
– Net result for the first half year 2011 amounted to EUR -2.9 million, or EUR -0.03 per basic share. This compares with a net result of EUR -20.5 million, or EUR -0.25 per basic share in the first half of 2010. The first half year 2011 net result was positively impacted by taxes of EUR 93 thousand as well as a positive financial result of EUR 487 thousand.
The Group-s balance sheet includes EUR 41.3 million in cash and reduced inventory levels to EUR 8.9 million. Per June 2011 an amount of EUR 1.3 million has been drawn from the existing credit lines. The accounts payable position decreased with EUR 10.9 million, from EUR 30.1 million at year end 2010 to EUR 19.1 million. The additional amount of EUR 33 million received in the first half year 2011 and with respect to the extensions of the software- and license agreement with Huawei Technologies, resulted in an increase of the deferred revenues compared to year-end 2010.

Option, the wireless technology company, is a leading innovator in the design, development and manufacture of 3G HSUPA, HSDPA, UMTS, EDGE, and WLAN technology products for wireless connectivity solutions. Option has built up an enviable reputation for creating exciting products that enhance the performance and functionality of wireless communications. Option-s headquarters are in Belgium (Leuven). The company has Research & Development in Belgium (Leuven) and Germany (Augsburg), and an ISO 9001 production engineering and logistics facility in Ireland (Cork). Option also has offices in Europe, US, Greater China and Japan. For more information please visit our website www.option.com.