Aastra Reports First Quarter 2007 Financial Results
TORONTO, ONTARIO (April 24, 2007) -- Aastra Technologies Limited - (TSX: “AAH”) today announced its unaudited financial results for the first quarter ended March 31, 2007. Sales for the three months ended March 31, 2007 were $153.3 million compared to sales of $145.7 million for the same period of 2006, an increase of 5.2%. Sales in the European Enterprise Communication segment increased 6.9% from $120.4 million in the three months ended March 31, 2006 to $128.7 million in the same period of 2007. Sales in this segment were positively impacted by the decline in the Canadian Dollar to the Euro and Swiss Franc compared with the first quarter last year. Sales in the North American Enterprise Communication segment were $24.6 million in the three months ended March 31, 2007 from $25.3 million in the same period of 2006 primarily as a result of weakness in U.S. sales during the first quarter.
Gross margin was 42% of sales for the three months ended March 31, 2007, consistent with the same period last year. Research and development expenses in the first quarter of 2006 were $14.4 million or 9.4% of sales, compared to $14.9 million or 10.2% of sales in the same quarter of 2006. The reduction in research and development expenses reflects the impact of restructuring efforts taken in Europe subsequent to the first quarter of 2006. Selling, general and administrative (“SG&A”) expenses were $37.5 million or 24.5% of sales in the quarter compared to $33.4 million or 22.9% of sales in the first quarter of 2006. The increase in SG&A expenses was driven by higher sales and marketing expenses as well as the impact of foreign exchange.
Gains from foreign exchange were $1.2 million in the first quarter of 2007 compared with only $0.2 million in the same period last year as the Canadian Dollar weakened against the Euro, the Swiss Franc and the U.S. Dollar. The Company recorded investment income of $1.1 million in the first quarter of 2007 compared to $0.6 million for the first quarter of 2006 mainly as a result of comparatively higher average cash balances. Income tax expense was $2.7 million in the first quarter or 24.5% of pre-tax profits compared to $1.9 million or 19.8% of pre-tax profits in the first quarter of 2006. In addition, the Company recorded a loss of $0.1 million net of tax, in the first quarter of 2007 as a result of a post closing adjustment related to the May 2006 sale of the Digital Video business.
As a result, net earnings for the three months ended March 31, 2007 were $8.2 million or $0.50 diluted earnings per share compared to $7.6 million or $0.42 diluted earnings per share in the same period last year.
On March 31, 2007, Aastra’s balance of cash and short-term investments was $122.8 million compared to $115.7 million on December 31, 2006. Cash flow from operations for the three months ended March 31, 2007 was $10.5 million compared to $7.6 million for the same period of 2006. In addition, the Company used $1.6 million to repurchase 50,000 common shares during the first quarter of 2007 under its on-going Normal Course Issuer Bid.
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 networking products, including terminals, systems, and applications. For additional information on Aastra, visit our website at http://www.aastra.com/ .
From time to time, we make written or oral forward-looking statements within the meaning of applicable Canadian securities legislation. We may make such statements in this press release, in other filings with Canadian regulators in reports to shareholders or in other communications. These forward-looking statements include, among others, statements with respect to our medium-term and 2007 objectives, and strategies to achieve our objectives, as well as statements with respect to our beliefs, outlooks, plans, objectives, expectations, anticipations, estimates and intentions. The words “may,” “could,” “should,” “would,” “suspect,” “outlook,” “believe,” “plan,” “anticipate,” “estimate,” “expect,” “intend,” “forecast,” “objective” and words and expressions of similar import are intended to identify forward-looking statements. 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 predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution readers not to place undue reliance on these statements as a number of important factors could cause our actual results to differ materially from the expectations expressed in such forward-looking statements.
As described in detail under the heading “Risk Factors” in our Annual Information Form filed on www.sedar.com , the material factors that could cause our actual results to differ materially from the forward-looking statements in this press release include: integration of our recent acquisitions and continued demand for our products; exchange rate fluctuation of the Canadian Dollar against other currencies, particularly with respect to the Swiss Franc, Euro and US Dollar; product concentration and limited range of products; geographic market concentration in Europe; reliance on third party manufacturers and component suppliers; longer credit terms to customers; continued implementation of our enterprise resource planning system; potential fluctuations in quarterly financial results, particularly as a result of seasonality and geographic market concentration; risks associated with product returns and defects; intellectual proprietary protection; security; competition and rapid technological change in our market; and the risk of third party claims for infringement.
We caution that the foregoing list of important factors that may affect future results is not exhaustive. When relying on our forward-looking statements to make decisions with respect to us, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Additional information about these factors that may affect future results can be found under the “Risk Factors” section and in our 2006 Annual Information Form. We do not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by us or on our behalf.
For further information contact:
Allan Brett, CFO,