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Option reports First Half Year 2011 results

Option reports First Half Year 2011 results

Option N.V., 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.

Business Highlights:

  • At CES (US) Option announced the world’s smallest module to combine GSM/HSPA, CDMA/EV-DO, GPS/ GLONASS and circuit-switched voice, all on a component the size of a postage stamp and as thin as a five-cent coin or a Euro. This second-generation GTM601/GTM609 embedded modules will power a new breed of consumer and business devices that are ultra-thin, super-fast and globally ready.
  • At the Mobile World Congress (Spain) Option and InterDigital showcased a new bandwidth management software solution integrated with Option’s uCAN® Connect software platform. This bandwidth management solution includes software that allows devices to communicate simultaneously with multiple wireless networks to match network performance to application requirements in real-time. This intelligent connection increases coverage, reliability, security, and aggregates the available bandwidth to the sum of all networks combined.
  • At CeBIT (Germany) Option and KOBIL demonstrated mIDentity 3G a unique 3G security solution delivering endpoint security that makes access to sensitive data effortless, wherever you are. The user simply needs to insert mIDentity 3G into a computer to get access to a fully secured and centrally managed application.
  • In April, Option and Avnet Embedded signed a distribution agreement covering 17 European countries for the distribution of Option’s portfolio of embedded wireless products and the uCAN® connection management software. 2
  • In June Option announced that five embedded modules were now data certified by AT&T. The modules are designed for a wide variety of mobile devices including tablets, consumer electronic devices, netbooks, routers and notebooks. They are also a perfect fit for a wide range of high bandwidth M2M applications such as digital signage, automotive, security cameras and more.
  • The same day as the announcement of the data certification of the modules, AT&T and Option also introduced a 4G connection kit for Emerging Device Developers including a network-ready certified 4G module and streamlined integration tools to speed up the development Cycle and time to market for new consumer and M2M solutions.
  • Also in June the Company unveiled the GlobeSurfer® III+ and announced Turkcell as a customer for this new product. The GlobeSurfer III+ is the new and next generation of mobile broadband 3G routers. Being very portable, not bigger than a regular book, and with Plug ‘n Play connectivity, this new 3G router is the ideal solution for anyone who wants to share a 3G connection with multiple users via the router’s powerful Wi-Fi connection. As such the GlobeSurfer III+ is a perfect fit for a wide range of uses such as sharing a 3G connection at home or in a mobile office or any kind of “mobile home or office” like a boat or caravan, holiday homes or a construction site where a single 3G connection needs to be shared with several family members or colleagues.
  • On July 4th Option announced the VIU2, the new mobile 3G camera that allows anyone to easily set up and manage their own professional-level security solution. This security solution is ideally suited for the surveillance of homes, warehouses, vacation homes, construction sites, offices and much more. The VIU² is the only plug & play stand-alone security solution that can stream live video and audio from anywhere to any device that has a connection to the Internet, making it unique in its kind.

[expand title=”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.

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About Option
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 established an impressive reputation for creating exciting products that enhance the performance and functionality of wireless communications. Option is headquartered in Leuven, Belgium. The company also has Research & Development in Belgium (Leuven), Germany (Augsburg) and an ISO 9001 production engineering and logistics facility in Ireland (Cork). Option maintains offices in Europe, US, Greater China and Japan. For more information please visit www.option.com.
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