Aastra Reports 1st Quarter Financial Results.TORONTO Toronto (tərŏn`tō), city (1998 est pop. 2,400,000), provincial capital, S Ont., Canada, on Lake Ontario. Toronto is the largest city in Canada and since the 1970s has been one of the fastest-changing cities in North America, experiencing -- Aastra Technologies Aastra Technologies Limited (TSX: AAH) headquartered in Concord, Ontario, Canada, makes products and systems for accessing communication networks including the Internet. Limited - (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :AAH aah interj. Used to express pleasure, satisfaction, surprise, or great joy. intr.v. aahed, aah·ing, aahs To exclaim in pleasure, satisfaction, surprise, or great joy: ) today announced its unaudited financial results for the first quarter ended March 31, 2005. Net earnings for the three months ended March 31, 2005 were $6.5 million or $0.37 diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of compared to $4.6 million or $0.27 diluted earnings per share in the same period last year. The first quarter results for this year include the results of operations for one month from the EADS EADS European Aeronautic Defence and Space Company N.V. EADS Expeditionary Air Defense System (USMC) EADS Extended Air Defense Systems EADS Environmental Assessment Data System EADS Echelons Above Division Study Enterprise Telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. acquisition that was completed on February February: see month. 28th. Excluding the impact of this acquisition, net earnings would have been $8.5 million or $0.48 diluted earnings per share, an increase of 85% for the comparable period last year. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the three months ended March 31, 2005 were $80.9 million compared to net sales of $64.0 million for the same period last year, an increase of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 26%. Net sales from the recently acquired EADS Enterprise Telephony group were approximately $17 million for the month of March. Excluding the impact of this acquisition, net sales would have been approximately $64 million, consistent with the same period last year. Net sales in the Enterprise Communications segment, including sales from the EADS acquisition, were $76 million in the first quarter compared to $55 million for the three months ended March 31, 2004. Excluding the acquisition, net sales in this segment increased by over 7% to $59 million when compared to the same period last year. Net sales from the Network Access segment were $5 million in the first quarter compared to $9 million in the same period last year. Sales in this segment were primarily related to sales of the digital video products while revenue from the CVX CVX ChevronTexaco (stock symbol) CVX Comunidad de Vida Cristiana (Christian Life Community) CVX Code Veronica X (game) CVX Critical Viscosity of Xenon CVX Carrier, Experimental product line continued to decline as expected. Gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. was 48% of sales for the three months ended March 31, 2005 consistent with the gross margin levels experienced in the same quarter last year. Continued improvements in the gross margin on our existing product lines was offset by the lower gross margins experienced on the new product lines acquired from EADS. Research and development expenses in the first quarter of 2005 were $7.9 million or 10% of sales, compared to $6.4 million or 10% of sales in the comparable quarter of 2004. Excluding the impact of the EADS acquisition, research and development expenses would have declined by 10% to $5.8 million. Selling, general and administrative expenses were $20.6 million or 25% of sales in the quarter compared to $17.2 million or 27% of sales in the first quarter of 2004. Excluding the impact of the EADS acquisition, selling, general and administrative expenses would have declined by over 10% when compared to the last period last year. Earnings before income taxes, amortization and interest for the quarter were $11.6 million or 14% of sales compared to $9.1 million or 14% of sales in the same period of 2004. Amortization of capital and intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. , excluding tooling, was $3.3 million for the first quarter compared to $2.9 million in the same period last year. Amortization of capital and intangible assets arising from the EADS acquisition was $0.8 million during the first quarter. Despite a significant decrease in the level of cash and short term investments upon the completion of the EADS acquisition in February, the Company recorded investment income of $0.4 million in the first quarter compared to $0.5 million for the first quarter last year as a result of higher average rates of return on its excess cash this quarter. Income tax expense was $1.4 million in the first quarter or 17% of pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta profits compared to $0.5 million or 10% of pre-tax profits in the first quarter last year. While income tax rates have continued to be impacted by profits in lower tax jurisdictions, there was a continued shift towards more of the Company's taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. coming from higher tax jurisdictions in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). during the first quarter.As a result of the payment of approximately $88 million, net of acquired cash, on the EADS acquisition, Aastra experienced a decrease in cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments to approximately $44 million at the end of the first quarter from a balance of approximately $129 million at the end of December December: see month. 2004. During the first quarter, the Company generated approximately $4 million of positive cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses , net ofthe addition of approximately $6 million of working capital primarily related to the acquisition. About Aastra Technologies Limited Aastra Technologies Limited (TSX: "AAH"), headquartered in Concord, Ontario
Certain information discussed in this press release is forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. and is subject to important risks and uncertainties. Forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. include statements of plans, objectives, strategies and expectations. The words "anticipate", "believe", "estimate", and "expect" and similar expressions are intended to identify forward looking statements. The results or events predicted in these statements may differ materially from actual results or events. Please refer to reports filed by Aastra with securities regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities in Canada for an identification of factors which could cause results or events to differ from current expectations. Aastra disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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AASTRA TECHNOLOGIES LIMITED
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
Stated in thousands of Canadian dollars except per share data
1st QUARTER
Three months
ended March 31st
2005 2004
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Sales $ 80,927 $ 63,964
Cost of goods sold 41,845 32,979
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$ 39,082 $ 30,985
Selling, general and administrative 20,614 17,221
Research and development 7,860 6,428
Amortization 3,287 2,895
Foreign exchange loss (gain) (80) (194)
Investment Income (491) (519)
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Earnings before income taxes $ 7,892 $ 5,154
Income taxes 1,351 549
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Net earnings for the period $ 6,541 $ 4,605
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Basic earnings per share for
the period (note 4) $ 0.38 $ 0.27
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Diluted earnings per share for the period
(note 4) $ 0.37 $ 0.26
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(a) Actual common shares outstanding as at March 31, 2005
- 17,247,834 (2004 - 17,062,609)
(b) Weighted average common shares outstanding for the three months
ended March 31, 2005-17,227,692
(2004 - 17,047,698)
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Stated in thousands of Canadian dollars
1st QUARTER
Three months
ended March 31st
2005 2004
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Cash and cash equivalents provided by (used for)
operations:
Net earnings for the period $ 6,541 $ 4,605
Amortization of capital assets 2,500 2,828
Amortization of intangible assets 1,711 1,613
Future income taxes (1,053) -
Stock compensation expense 107 62
Pension asset amortization 25 38
Net change in non-cash operating working capital (5,778) 1,911
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4,053 11,057
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Cash and cash equivalents provided by (used in)
financing activities:
Bank indebtedness (163) 1,052
Issuance of common shares 391 327
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228 1,379
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Cash and cash equivalents provided by
(used for) investing activities:
Short-term investments 57,581 41,633
Net purchase of capital assets (876) (452)
Business acquisition (note 2) (87,535) -
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(30,830) 41,181
Foreign exchange on cash held in
foreign currency (1,065) 7
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Increase (decrease) in cash and cash equivalents (27,614) 53,624
Cash and cash equivalents, beginning of period 64,181 25,879
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Cash and cash equivalents, end of period $ 36,567 $ 79,503
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The interim Consolidated Financial Statements for the three months
ended March 31, 2005 have not been reviewed by an auditor.
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AASTRA TECHNOLOGIES LIMITED
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
Stated in thousands of Canadian dollars
MARCH 31ST DECEMBER 31st MARCH 31ST
2005 2004 2004
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Assets
Current assets:
Cash and cash equivalents $ 36,567 $ 64,181 $ 79,503
Short-term investments 7,272 64,853 14,679
Accounts receivable 119,158 50,149 66,352
Income taxes receivable 2,039 2,039 -
Net investment in leases 1,160 756 399
Inventories 68,219 47,229 58,348
Deposits and prepaid expenses 7,697 2,193 1,596
Future income taxes 3,162 1,326 4,319
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$ 245,274 $ 232,726 $ 225,196
Future income taxes 9,983 9,690 5,622
Net investment in leases 2,752 1,793 1,886
Capital assets, net 35,480 16,974 22,212
Accrued pension asset 982 1,046 1,101
Goodwill 6,353 6,353 6,353
Intangible assets 45,241 13,875 21,804
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$ 346,065 $ 282,457 $ 284,174
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Liabilities and Shareholders'
Equity
Current liabilities:
Indebtedness 1,118 - 7,662
Accounts payable and accrued
liabilities 86,051 44,901 59,646
Income taxes payable 11,473 8,972 5,383
Deferred revenue 8,703 2,339 4,826
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$ 107,345 $ 56,212 $ 77,517
Contingent consideration payable 6,060 6,300 6,180
Pension liability 4,361 - -
Future income taxes 1,075 - 1,135
Other long term liability 5,341 - -
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124,182 62,512 84,832
Shareholders' equity:
Share capital 102,798 102,407 101,026
Contributed surplus 440 333 147
Cumulative foreign currency
translation adjustment (4,890) 211 768
Retained earnings 123,535 116,994 97,401
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221,883 219,945 199,342
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$ 346,065 $ 282,457 $ 284,174
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The interim Consolidated Financial Statements for the three months
ended March 31, 2005 have not been reviewed by an auditor.
AASTRA TECHNOLOGIES LIMITED
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)
Stated in thousands of Canadian dollars
Cumulative
Common Share Contributed Translation Retained
Shares Capital Surplus Adjustment Earnings Total
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Balance,
December
31,
2004 17,206,634 $ 102,407 $ 333 $ 211 $116,994 $219,945
Shares
issued
on
exercise
of
options 41,200 391 - - - 391
Stock
option
compensation - - 107 - - 107
Translation
of self
sustaining
operations - - - (5,101) - (5,101)
Net earnings - - - - 6,541 6,541
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Balance,
March
31,
2005 17,247,834 102,798 440 (4,890) 123,535 221,883
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Cumulative
Common Share Contributed Translation Retained
Shares Capital Surplus Adjustment Earnings Total
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Balance,
December
31,
2003 17,032,109 100,699 85 1,101 92,796 194,681
Shares
issued
on
exercise
of
options 30,500 327 - - - 327
Stock
option
compensation - - 62 - - 62
Translation
of self
sustaining
operations - - - (333) - (333)
Net earnings - - - - 4,605 4,605
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Balance,
March 31,
2004 17,062,609 $101,026 $ 147 $ 768 $ 97,401 $199,342
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