Aastra Reports Record Profit in 2nd Quarter.TORONTO--(BUSINESS WIRE)--July 23, 1998--Aastra Technologies (Alberta Stock Exchange Alberta Stock Exchange See Canadian Venture Exchange (CDNX). :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: .) Aastra Technologies Aastra Technologies Limited (TSX: AAH) headquartered in Concord, Ontario, Canada, makes products and systems for accessing communication networks including the Internet. Limited - (ASE (Adaptive Server Enterprise) A relational DBMS from Sybase that runs on Windows NT/2000, Linux and a variety of Unix platforms. ASE is a comprehensive and robust data management product with a long history dating back to the late 1980s. : "AAH") is pleased to report a record quarterly profit in the second quarter resulting from record 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 fifth consecutive quarter. Net sales for the three months ended June 30, 1998 were $8,168,900, a 188 percent increase from sales of $2,833,800 for the same period in 1997. Sales for the six months ended June 30, 1998 were $13,217,700 compared to sales of $4,591,000 for the six months ended June 30, 1997. Aastra reported a record quarterly net income of $205,400 or $0.03 per share for the second quarter ended June 30, 1998 compared to a net loss of $139,900 or $0.01 per share for the second quarter of 1997. The net income for the six months ended June 30, 1998 was $81,700 or $0.01 per share compared to a net loss of $504,900 or $0.06 per share for the same period in 1997. During the second quarter, the Company continued to experience strong growth in its two key markets, the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. retail and telephone company ("Telco") channels. Growth in the second quarter exceeded management's expectations. In the retail market, driven by strong sales of BELL(R) Equipment branded products to mass retailers in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , net sales grew to $3,369,900 for the second quarter compared to $825,100 for the same period last year. Telco sales were aided by stronger than expected promotional program sales in the United States. Sales to Telcos increased more than 150 percent to $4,748,200 for the three months ended June 30, 1998 from $1,894,700 for same period last year. Although the Company's gross margin has decreased to 18 percent in the second quarter compared to 19.6 percent in the same period last year, cash flow has been improved and inventory risk has been reduced during 1998. Due to the economic difficulties in Asia, early in 1998 the Company made a decision to improve its inventory management to reduce its exposure to fluctuating prices from its contract manufacturers in Asia. As a result, inventory turnover improved to 45 days as at June 30, 1998, down from 120 days as at December 31, 1997. This decision has enabled the Company to maintain a positive cash flow despite its rapid sales growth during the first half of 1998. Aastra ended the second quarter with $461,200 in cash on hand and $4 million of available credit on its operating line facilities. Aastra Technologies Limited develops and distributes telecommunications equipment. Aastra products include basic telephone sets, caller ID A telephone company service that sends the caller's telephone number between the first and second ring of the call. If the calling number is not blocked, the calling number is displayed on the handset or base station of the called party. devices and custom-engineered telephone sets that incorporate Telco services including caller ID, call waiting, call forwarding and distinctive ringing. Aastra sells to all the major Telcos in Canada and to several U.S. Telcos including GTE GTE General Telephone & Electronics GTE Génie Thermique et Énergie (French) GTE Gas Turbine Engine GTE Global Tropospheric Experiment GTE Geothermal Energy GTE Gas Turbine Efficiency plc (Sweden & USA) , Sprint, Bell Atlantic and Pacific Telesis. In the retail market, Aastra has the exclusive license to use the "BELL(R)Equipment - SONECOR" trademark for telephones sets and its products are distributed to Sam's Clubs and Circuit City as well as other mass retailers. The Alberta Stock Exchange has neither approved nor disapproved of the information included in this press release.
CONTACT: Aastra Technologies Inc.
Allan Brett, 416/736-7070, Ext. 360
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