TANDBERG Reports Third Quarter 2006 Results.Revenue of 109.6 MUSD and Operating Profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. of 24.9 MUSD in 3Q06 OSLO, Norway & NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- TANDBERG[R] (OSLO:TAA TAA - Track Average Amplitude .OL), today announced financial results for the third quarter ended September 30, 2006. Overview of 3Q06: * Record revenue of 109.6 MUSD with volume of 10,102 units * Pre-tax profit of 26.3 MUSD * Solid 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 of 38.8 MUSD * Announcement of PC video * Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. reflect continued investment in product development FINANCIALS Third quarter revenues were record high at 109.6 MUSD compared with 91.2 MUSD in the same quarter last year. 3Q06 gross margin was 67.9%, compared with 67.5% in the same quarter last year. Selling, general & administrative (SG&A) expenses for 3Q06 totaled 45.5 MUSD, compared with 35.6 MUSD in the same quarter last year. Operating profit was 24.9 MUSD compared with 23.6 MUSD in the same quarter last year. Earnings per share (after tax) were 0.164 USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. in 3Q06 compared with 0.144 USD in the same quarter last year. The Company generated cash flow from operations of 38.8 MUSD, which after a net cash outflow from investments of 6.2 MUSD and repurchase of shares of 65.1 MUSD, gave a total cash outflow of 32.6 MUSD. As of September 30, the Company had a cash balance of 146.1 MUSD and an equity ratio of 65.5%. OPERATIONS Discussing third quarter results, Fredrik Halvorsen, Chief Executive Officer, stated, "This was a solid quarter for TANDBERG. Traditionally an important U.S. Federal quarter, results were stronger than expected as the productivity value of video gained traction and drove rapid adoption in the federal government. Revenue reflected the continued momentum in the industry. TANDBERG is executing on target, and is aggressively investing in continued growth. To further its technology leadership, TANDBERG has recently announced that it is entering the PC video industry segment which positions the Company well for long-term growth. The revenue mix included network sales of 15.5% (up from 14.1% in the same quarter last year) and service sales of 14.3% of total revenues (up from 12.5% in the same quarter last year). Telepresence Meaning "long distance presence," it refers to videoconferencing applications that feel like a live meeting. Notable features are larger screens that may approach a virtual reality environment and sensors that keep at least one window focused on whomever is speaking at the moment. and validation of video by larger vendors caused a mix shift toward high-end systems. The balance sheet reflected good linearity and tight working capital management, resulting in strong cash flow." MARKETS In 3Q06, TANDBERG sold 10,102 units compared with 8,371 units in the same quarter last year, a 20.7% increase. AMERICAS Revenue in the Americas Theatre during 3Q06 totaled 64.4 MUSD compared with 54.8 MUSD the same quarter last year. Solid execution across the Enterprise sector and balanced growth across all geographies contributed to the strong theatre performance. The U.S. Federal team achieved excellent results, realizing the benefits of new program initiatives, expanded market coverage and a strong and more mature team. Sales force productivity in the Americas was at a record level. Focus on sales mix sales mix See product mix. and strong sales execution led to additional network and service sales. Overall good pipeline development yielded good linearity. Focus continues on channel development in the Enterprise sector. EMEA (Europe, Middle East, Africa) Refers to that region of the world. For example, one might see products packaged differently for the UK, EMEA and Asia Pacific markets. Revenue in EMEA during 3Q06 totaled 35.8 MUSD, compared with 28.0 MUSD in the same quarter last year. The strong year-over-year growth was due to last year investments in channel partner expansion, a healthy business environment and strong execution. The theatre saw solid demand in personal video systems, including the HD products announced in July. Greater focus on long-term sales execution is producing better linearity and balanced performance across all regions. Investments in a customer service center and competence building are allowing deeper and more strategic client relationships. ASIA Asia (ā`zhə), the world's largest continent, 17,139,000 sq mi (44,390,000 sq km), with about 3.3 billion people, nearly three fifths of the world's total population. PACIFIC Revenue in APAC APAC Australian Partnership for Advanced Computing APAC Agricultural Policy Analysis Center APAC Asia and Pacific APAC Asian Pacific American Coalition APAC Adapted Physical Activity Council (American Alliance for Health) during 3Q06 totaled 9.5 MUSD, compared with 8.4 MUSD in the same quarter last year. While the theatre had satisfactory performance in Southeast Asia Southeast Asia, region of Asia (1990 est. pop. 442,500,000), c.1,740,000 sq mi (4,506,600 sq km), bounded roughly by the Indian subcontinent on the west, China on the north, and the Pacific Ocean on the east. and Australia, a lack of good sales management Sales Management Role and Goal Importance of sales management is critical for any commercial organization. Expanding business in not possible without increasing sales volumes, and effective sales management goal is to organize sales team work in such a manner that ensures a hurt performance in North Asia North Asia or Northern Asia is a subregion of Asia. The most common definition of the term is;
STRATEGIC INITIATIVES TANDBERG is aligned along a single unifying mission, "Changing the way people communicate", executing on three main business priorities. Aggressively upgrade our core: TANDBERG maintained a good balance between short-term and long-term business performance, with solid linearity in both the Americas and EMEA. The Company continued to have good traction with key accounts and multinationals. In addition, productivity messaging and solution selling had a positive impact in the U.S. Federal space. Making video accessible: TANDBERG entered the PC video segment this quarter with two announcements. The first, full integration of video with IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) Lotus[R] Sametime[R], makes TANDBERG video a key component in an organization's unified communications The real time redirection of a voice, text or e-mail message to the device closest to the intended recipient at any given time. For example, voice calls to desk phones could be routed to the user's cellphone when required. strategy and is deliverable in 1Q07. The second, TANDBERG's PC video solution, will promote widespread adoption of video and is available 2Q07. In addition, Telepresence and HD capabilities are generating increasing demand for high-end systems. Making video intuitive: In addition to current product integrations with Cisco, Nortel, Microsoft and IBM Many people are too new to the computer industry to remember that IBM once occupied the lofty position that Microsoft currently enjoys. Today, it's a Microsoft versus The Rest of the World computer industry. Yesterday, it was IBM versus everybody else. , TANDBERG announced that its full line of MXP MXP In currencies, this is the abbreviation for the Mexican Peso. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. video endpoints and MPS multipoint control units See MCU. have been certified Avaya-compliant. OUTLOOK The Board is very encouraged by third quarter top line growth, solid gross margin and profitability. The Company has an established policy of not providing short-term guidance. However, the strong performance in the third quarter should not be the basis for excessive expectations for the fourth quarter. At this time, revenue for the fourth quarter is expected at about the same level as the third quarter. WEBCAST/CONFERENCE CALL DETAILS Today at 11:00 a.m. Eastern Time or 5:00 p.m. Central European Time Central European Time Noun the standard time adopted by Western European countries one hour ahead of Greenwich Mean Time, corresponding to British Summer Time Abbrev: (CET) , Fredrik Halvorsen, Chief Executive Officer, will host a live webcast/conference call from Oslo, Norway. Additionally, a PowerPoint presentation will accompany the webcast/conference call. To access the webcast, please visit: https://tandbergevents.webex.com For those who prefer to dial-in, the conference call can be accessed at +1.617.614.3933 (international) or at +1.800.203.4313 (U.S. callers). The audience passcode for the call is TANDBERG. An online archive of the broadcast will be available within one business day. [TABLE OMITTED] For further information please contact Senior Vice President of Operations Terje Rogne, ph. + 47 98 28 98 02. Fourth quarter results will be released on February 15, 2007. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] BALANCE SHEET 30 SEP 31 DEC Figures in USD million 2006 2005 2005 Non-current assets Intangible assets Goodwill, patents and development 75.6 60.3 71.4 Deferred income tax assets - - 4.5 Tangible assets 6.7 5.7 4.2 Financial assets - 0.2 - Current assets Inventory 29.0 23.9 26.5 Accounts receivable 81.5 86.8 79.2 Other current assets 8.6 1.3 3.0 Cash and bank deposits 146.1 224.9 202.8 Total assets 347.6 403.1 391.5 Equity Share capital 13.4 15.6 15.6 Treasury shares (1.5) (1.3) (1.9) Share premium 25.3 104.6 101.1 Other equity 190.5 188.1 180.9 Non-current liabilities 0.9 2.5 - Current liabilities Accounts payable 24.5 15.3 22.8 Tax deductions and duties payable (1.3) (0.5) (0.8) Taxes payable 22.3 28.8 18.2 Other current liabilities 73.3 49.8 55.6 Total equity and liabilities 347.6 403.1 391.5 [TABLE OMITTED] [TABLE OMITTED] FINANCIAL STATEMENTS - BASIS FOR PREPARATION The enclosed consolidated condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. financial statements have been prepared in accordance with IAS See iPlanet Application Server. 1. (computer) IAS - The first modern computer. It had main registers, processing circuits, information paths within the central processing unit, and used Von Neumann's fetch-execute cycle. 34, "Interim Financial Reporting". SIGNIFICANT ACCOUNTING POLICIES The accounting policies and methods of computation used in the preparation of the financial statements are consistent with the policies used in the annual financial statements for the year ended December 31, 2005. The enclosed consolidated condensed financial statements should be read in conjunction with the 2005 annual financial statements, which include a full description of the Group's accounting policies. ABOUT TANDBERG TANDBERG is a leading global provider of visual communication products and services. The Company has dual headquarters in New York and Oslo. TANDBERG designs, develops and markets systems and software for video, voice and data communication. The Company provides sales, support and value-added services A value-added service (VAS) is a telecommunications industry term for non-core services or, in short, all services beyond standard voice calls and fax transmissions. in more than 90 countries worldwide. TANDBERG is publicly traded on the Oslo Stock Exchange Oslo Stock Exchange An exchange founded in 1819 and trading stocks, bonds, and stock options that is considered the options market of Norway. under the ticker TAA.OL. Please visit www.tandberg.net for more information. TANDBERG is a registered trademark or trademark in the U.S. and certain other countries. All other trademarks are property of their respective owners. |
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