Option Reports Fourth Quarter and Full Year 2006 Results



    LEUVEN, Belgium, March 1 /CNW/ - Option N.V. (EURONEXT Brussels: OPTI;
OPNVY), the wireless technology company, today announced its results for the
fourth quarter and the full fiscal year ended December 31, 2006. The financial
information reported in this release is presented in Euro and has been
prepared in accordance with the recognition and measurement criteria of IFRS
as adopted by the European Union (IFRSs). 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. These include
for 2006 the consolidation of Option Wireless Japan KK as well as for the
first time in the last quarter of 2006, the consolidation of the new
established subsidiaries Option Wireless Hong Kong Limited and its Taiwan
branch.

    
    Highlights of the full fiscal year and fourth quarter 2006:

    -   Full year revenues were EUR 279.9 million, an increase of 40.9%
        compared with the EUR 198.6 million total revenues realized during
        the full year 2005.

    -   Gross profit of 2006 amounted to EUR 104.6 million, an increase of
        23.9% compared with EUR 84.4 million in 2005 equivalent period. Gross
        margin in the full year 2006 was 37.4% on total revenues, compared
        with a gross margin of 42.5% in 2005.

    -   EBIT increased to EUR 42.1 million or 15.1% on total revenues during
        the full year 2006 compared with EUR 38.8 million in 2005.

    -   Net profit of fiscal year 2006 increased to EUR 35.3 million, or EUR
        0.86 per basic share and EUR 0.86 per diluted share. This compares
        with a net profit of EUR 29.0 million, or EUR 0.71 per basic share
        and EUR 0.70 per diluted share in 2005, representing an increase of
        21.8%(1).

    -   Total revenues of EUR 63.4 million for the fourth quarter of fiscal
        year 2006 were in line with the total revenues realized in the last
        quarter of 2005.

    -   Gross margin in Q4 2006 was 32.9% on total revenues, compared with
        gross margin of 38.1% of Q4 2005. Excluding one-off adjustments on
        the stock, the gross margin would have reached 34.5% in Q4 2006.

    -   The quarterly EBIT amounted to EUR 7.1 million or 11.2% on total
        revenues compared with EUR 11.9 million or 18.7% during the
        corresponding period in 2005.

    -   Net profit for the fourth quarter of fiscal year 2006 amounted to EUR
        6.4 million, or EUR 0.16 per basic share and EUR 0.16 per diluted
        share. This compares with a net profit of EUR 9.2 million, or EUR
        0.22 per basic share and EUR 0.22 per diluted share in Q4 2005 (1).
        Consolidated Performance

    For the period ended 31 December

                                                     Q4     Q4    YTD    YTD
    Million EUR (except per share figures)         2006   2005   2006   2005
    Total revenues.............................    63.4   63.9  279.9  198.6
    Gross profit...............................    20.9   24.3  104.6   84.4
    Operating expenses.........................    13.8   12.4   62.5   45.6
    EBIT.......................................     7.1   11.9   42.1   38.8
    Net profit                                      6.4    9.2   35.3   29.0
    Weighted average number of ordinary........
     shares after the stock split of...........
     April 24th 2006(2)........................      41     41     41     40
    ...........................................     249    249    249    648
    ...........................................     296    296    296    232
    Revised earnings per share after
     the stock split (EUR)(1)..................    0.16   0.22   0.86   0.71

    Non financial highlights of the fourth quarter included

    Customer announcements

    -   Uniwill, a leading manufacturer of notebooks, selects Option's
        embedded wireless module. The company manufactures notebooks for some
        of the world's leading brands as well as many strong local brands.

    -   3 Scandinavia offers HSDPA 3.6 services with Option's GlobeTrotter GT
        MAX.

    -   Australian mobile users to surf at 3.6Mbps using Option's GT MAX "7.2
        Ready" on Telstra's mobile broadband network.

    -   Cingular introduces the newest Option GlobeTrotter GT MAX laptop data
        card.

    -   Samsung Electronics and SK Telecom to launch new products with
        Option's HSDPA wireless modules inside: the Notebook Q40 and the
        Ultra-Mobile PC (UMPC) Q1.

    Product and technology announcements

    -   Option achieves industry's first HSUPA data calls using next
        generation wireless data card. HSUPA, the next step after HSDPA,
        enhances the data speed in the uplink up to a theoretical maximum of
        5.7 Mbps, from the 384 kbps currently available with HSDPA.

    -   The world's first UMTS 900 data call made using Option's HSDPA data
        card and Elisa's mobile communication network.

    -   Option unveils GlobeTrotter Express 7.2, the company's first
        ExpressCard wireless data card.

    -   Option unveils GlobeSurfer ICON 7.2. The compact device, which is
        small enough to be plugged directly into a PCs USB port, supports
        HSDPA 7.2 Mbps.

    Corporate announcement

    -   Norbert Metzner joins Option executive management team as its new
        Vice President Product Marketing.
    

    Commenting on the results, Jan Callewaert, Founder and CEO of Option
said, "In 2006, Option enjoyed revenue growth of 40.9% from 2005 to
EUR279.9 million representing very strong performance for the company. Net
earnings for 2006 were EUR35.3 million, an increase of 21.8% compared with
last year, reflecting our continuing focus on profitable growth.
    While technology delays pushed a substantial volume of year-end data card
sales into 2007, Q4 revenues of EUR 63.4 million were still in line with what
was a record fourth quarter in 2005. In line with our announcement in January,
the data cards have now been successfully certified, shipments are underway
and a revised delivery schedule will eliminate the backlog over the coming
months.
    Notwithstanding reduced deliveries in Q4, Option had record shipments of
1.82 million devices in 2006, up 64% compared with 2005. As a result, Option's
global market share improved to 35% from 32% last year based on ABI Research's
global market estimate of 5.2 million devices.
    Our growing market leadership reflects the investment we have made, and
continue to make, in developing close working relationships with our operator
partners: our customer list grew from 70 to more than 90 during 2006.
    We started 2007 with an unprecedented order book for all our products. In
addition, we are at the forefront of a new category of 'finger-top'
wirelessly-connected portable multimedia devices that will shortly debut in
Japan.
    We also continue to diversify our revenue streams both geographically and
across product lines. In 2007, we are anticipating a tripling of our revenue
from Asia and the U.S. as well as significant growth in our non-data card
business.
    For 2007, we expect that strong sales in the first half of the year will
be followed by further acceleration of the business in the second half. We
remain comfortable with our previously stated 2007 revenue guidance of EUR 355
- 375 million."

    Financial Information

    Income Statement

    Revenues

    Full year total revenues of EUR 279.9 million showed an increase of 40.9%
compared with the 198.6 total revenues realized during the full year 2005.
    Total revenues of EUR 63.4 million for the fourth quarter of fiscal year
2006 were in line with the revenues realized in the last quarter of 2005.

    Gross Profit

    Gross margin in the full year 2006 was 37.4% on total revenues, compared
with gross margin of 42.5% in 2005. Costs of goods sold of EUR 175.3 million
during 2006 resulted in a gross profit of EUR 104.6 million, an increase of
23.9% compared to EUR 84.4 million in 2005 equivalent period.
    Gross margin in Q4 2006 was 32.9% on total revenues, compared to a gross
margin of 38.1% of Q4 2005. Excluding one-off adjustments on the stock, the
gross margin would have reached 34.5% in Q4 2006.

    Operating expenses

    During the full year 2006, the operating expenses, including depreciation
and amortization charges, were EUR 62.5 million, compared to EUR 45.6 million
in 2005.
    Thanks to an extended focus on royalty commitments, accounted as variable
operating costs, the company obtained improved conditions which had a
favourable impact on the sales and marketing expenses at year-end.
    The quarterly operating expenses, including depreciation and amortization
charges, were EUR 13.8 million for the fourth quarter of 2006, compared to EUR
12.4 million in the fourth quarter of 2005.

    EBIT

    EBIT increased to EUR 42.1 million or 15.1% on total revenues during the
full year 2006 compared to EUR 38.8 million or 19.5% on total revenues in
2005, representing a growth of 8.7%.
    The quarterly EBIT amounted to EUR 7.1 million or 11.2% on total revenues
compared to EUR 11.9 million or 18.7% during the corresponding period in 2005.

    Financial Result

    During 2006, Option obtained a positive financial result of EUR 600
thousand. The total exchange rate gains amounted to EUR 881 thousand mainly
thanks to USD rates and Option received EUR 1.112 thousand from risk free
investments of the available cash.
    A total of EUR 1.253 thousand financial discounts were given to customers
for cash payments and the other financial costs of EUR 140 thousand were
mainly related to financial leases and bank charges.

    Net Profit

    On April 24th, 2006, the company executed a four for one stock split.
Applying the transaction retroactively, earnings per share would have been the
following:
    Net profit of fiscal year 2006 was EUR 35.3 million, or EUR 0.86 per
basic share and EUR 0.86 per diluted share. This compares with a net profit of
EUR 29.0 million, or EUR 0.71 per basic share and EUR 0.70 per diluted share
in 2005, representing an increase of 21.8%.
    Net profit for the fourth quarter of fiscal year 2006 amounted to EUR 6.4
million, or EUR 0.16 per basic share and EUR 0.16 per diluted share. This
compares with a net profit of EUR 9.2 million, or EUR 0.22 per basic share and
EUR 0.22 per diluted share in Q4 2005.

    Balance Sheet

    Cash decreased from EUR 49.2 million at the end of 2005 to EUR 36.1
million at the end of 2006 mainly due to prepayments related to royalty
agreements and an increased need for working capital, mainly related to
inventories and trade receivables.
    During 2006, inventories increased from EUR 19.5 million to EUR
40.6 million. This increase is explained by an increase of the work in
progress stock and components due a production delay in the fourth quarter and
the building of finished goods ready for delivery in the beginning of the
first quarter of 2007. The level of finished goods at year-end remained low,
representing 8.4% of total inventory value.
    Trade and other receivables increased from EUR 37.1 million at the end of
2005 to EUR 54.2 million at the end of 2006. This increase was mainly related
to the trade receivables.
    Fixed assets were EUR 42.1 million (net book value) as at December 31st
2006, an increase of EUR 22.7 million compared to the net book value of EUR
19.4 million at the end of the previous fiscal year. During 2006, the total
investments in tangible assets, mainly test equipment, amounted to EUR
6.4 million and the Company invested EUR 27.4 million in intangible assets of
which 10.0 million for capitalized development projects and 17.4 million
mainly for additional licenses.
    Total current liabilities increased from EUR 49.6 million at the end of
2005 to EUR 53.1 million at year-end 2006. This increase is mainly related to
the increased trade and other payables (+EUR 2.1 million) and increased income
tax payable (+EUR 1.6 million).
    The Company generated a deferred tax liability mainly as a result of the
capitalization of the commercial development projects under IFRS. In 2006,
this deferred tax liability decreased by EUR 569 thousand which was nearly
fully related to capitalization of development projects.
    On total assets of EUR 176.5 million, the equity amounted to EUR
111.6 million, which results in a solvency ratio of 63.2% at year-end.
    Cash flow generated from operating activities during 2006 amounted to EUR
4.9 million compared to EUR 34.8 million in the previous year. The decrease is
attributable to the combination of a higher net profit in 2006 and a decrease
of the cash generated from operations.

    - OPTION N.V. -

    Financial report prepared in accordance with International Financial
Reporting Standards (IFRSs)

    Consolidated income statement

    For the 12 month period ended 31 December

    
    Thousands EUR                      December 31, 2006   December 31, 2005
     (except per share figures)             Q4/2006             Q4/2005
                                            Audited             Audited
    Sales(3).........................   63 357    63 882   279 868   198 615
    Other income.....................
    Total Revenues...................   63 357    63 882   279 868   198 615
    Cost of products sold............  (42 483)  (39 541) (175 254) (114 203)
    Gross profit.....................   20 874    24 341   104 614    84 412
    Gross margin/Total revenues......     32.9%     38.1%     37.4%     42.5%
    Research and development
     expenses........................   (4 620)   (4 369)  (18 302)  (15 522)
    Sales, marketing and royalties...
     expenses........................   (5 772)   (5 987)  (32 794)  (24 180)
    General and administrative
     expenses........................   (3 367)   (2 062)  (11 381)   (5 945)
    Total operating expenses.........  (13 759)  (12 418)  (62 477)  (45 647)

    Profit from operations
    (EBIT)...........................    7 115    11 923    42 137    38 765
    EBIT/Total revenues..............     11.2%     18.7%     15.1%     19.5%
    Depreciation and amortization....    2 783     2 518    10 997     7 542
    EBITDA...........................    9 898    14 441    53 134    46 307

    EBITDA/Total revenues............     15.6%     22.6%     19.0%     23.3%

    Exchange gain/(loss).............      (94)     (426)      881    (2 243)
    Interest income/(expense)........      174      (266)     (281)      (81)
    Finance result...................       80      (692)      600    (2 324)
    Profit before taxes..............    7 195    11 231    42 737    36 441
    Tax expense......................     (791)   (2 043)   (7 421)   (7 448)
    Net profit.......................    6 404     9 188    35 316    28 993
    Weighted average number
     of ordinary shares..............   10 312    10 312    10 312    10 162
    .................................      324       324       324       058
    Diluted average number
     of ordinary shares..............   10 312    10 312    10 312    10 312
    .................................      324       324       324       407

    Earnings per share (in EUR)......     0.62      0.89      3.42      2.85
    Diluted earnings per share
     (in EUR)........................     0.62      0.89      3.42      2.81

    EPS after the stock split of
     April 24th 2006 (applied
     retroactively)..................
    Weighted average number of
     ordinary shares.................   41 249    41 249    41 249    40 648
    .................................    	 296       296       296       232
    Diluted average number
     of ordinary shares..............   41 249    41 249    41 249    41 249
    .................................      296       296       296       628
    Earnings per share (in EUR)......     0.16      0.22      0.86      0.71
    Diluted earnings per
     share (in EUR)..................     0.16      0.22      0.86      0.70

    - OPTION N.V. -

    Consolidated balance sheet
    Prepared in accordance with International Financial Reporting Standards
    (IFRSs)

    Thousands EUR                                               31        31
                                                          December  December
    For the period ended                                      2006      2005

    Assets                                                 Audited   Audited
    Current assets.......................................
    Cash and cash equivalents............................   36 062    49 288
    Trade and other receivables..........................   54 201    37 050
    Income tax receivable................................      110        20
                                                            40 572    19 495
    Inventories..........................................  130 945   105 853

    Non-current assets...................................   12 099     8 415
    Property, plant and equipment........................   29 998    11 031
    Intangible assets....................................    3 303     1 714
    Deferred tax assets..................................      144         -
    Other receivables....................................   45 544    21 160
    Total assets.........................................  176 489   127 013

    Equity and Liabilities...............................
    Current liabilities..................................
    Income tax payable...................................    3 914     2 320
    Trade and other payables.............................   49 137    47 020
    Current portion of long-term debt....................       74       286
    .....................................................   53 125    49 626

    Non-current liabilities..............................
    Trade and other payables.............................   11 326         -
    Deferred tax liabilities.............................      256       825
    Non-current portion of long-term debt................      148       222
    .....................................................   11 730     1 047

    Equity...............................................
    Issued capital.......................................    6 116     6 116
    Share premium........................................   43 865    43 865
    Reserves.............................................      335       357
    Retained earnings....................................   61 318    26 002
    Shareholders' equity.................................  111 634    76 340
    Total equity and liabilities.........................  176 489   127 013

    - OPTION N.V. -

    Consolidated cash flow statement
    Prepared in accordance with International Financial Reporting Standards
    (IFRSs)

    Thousands EUR                                               31        31
                                                          December  December
    For the period ended                                      2006      2005

    Operating activities                                   Audited   Audited
    Net profit (A).......................................   35 316    28 993
    Depreciation and amortization........................   10 987     7 540
    Impairment loss......................................       10         2
    Write-offs on inventories............................      145       636
    Write-offs on trade debtors..........................      200         1
    Unrealized foreign exchange losses/(gains)...........     (202)       (4)
    Interest income......................................   (1 112)     (786)
    Interest expense.....................................       97       157
    Loss/(gains) on sale of property,
     plant and equipment.................................       (5)        -
    Equity-settled share-based payment expense...........        -       115
    Tax expense..........................................    7 421     7 209
    Total non cash adjustments(B)........................   17 541    14 870

    Cash flow from operating activities before
     changes in working..................................
     capital(C)=(A)+(B).......................   52 857    43 863
    Decrease/(increase) in trade and other
     receivables.........................................  (16 996)  (21 007)
    Decrease/(increase) in inventories...................  (21 077)  (13 935)
    Increase/(decrease) in trade and other payables......   (2 296)   26 935
    Total changes in working capital(D)..................  (40 369)   (8 007)

    Cash generated from operations(E)=(C)+(D).   12 488    35 856
    Interests (paid)(F)..................................      (21)      (18)
    Interests received(G)................................      377       344
    Income tax (paid)/received(H)........................   (7 900)   (1 338)

    Cash flow from operating activities                      4 944    34 844
      (i)=(e)+(f)+(g)+(h).....................

    Investing activities
    Proceeds from sale of property,                              5         -
     plant and equipment.................................
    Proceeds from sale of intangible assets..............      227         -
    Acquisition of property, plant and equipment.........   (6 440)   (7 703)
    Acquisition of intangible assets.....................   (1 660)   (3 002)
    Development expenditures.............................  (10 011)   (6 070)
    Cash Flow from Investing Activities(j)...............  (17 879)  (16 775)

    Financing activities.................................
    Proceeds from the issue of share capital.............        -       518
    Payment of finance lease liabilities.................     (286)     (911)
    Cash flow from financing activities(k)...............     (286)     (393)

    Net increase/(decrease) in cash and
     cash equivalents(I)+(J)+(K).........................  (13 221)   17 676

    Cash and cash equivalents at beginning of period.....   49 288    31 612
    Effect of exchange rate fluctuations on cash held....       (5)        -
    Cash and cash equivalents at end of period...........   36 062    49 288
    Difference...........................................  (13 221)   17 676

    Consolidated Statement of Changes in Equity

    Thousands EUR                       Shareholders' equity

    For the year ended 31 December 2005

                         Issued    Share   Share-  Transl  Retained    Total
                        capital  premium    based   -ation earnings   equity
                                          payment reserves
                                         reserves

    As per 1
     January 2005......   5 994   43 469      245        -   (2 991)  46 717

    Net profit.........       -        -        -        -   28 993   28 993
    Translation
     reserves..........       -        -        -       (3)       -       (3)
    Capital increase...     122      396        -        -        -      518
    Share-based
     payments..........       -        -      115        -        -      115

    As per 31
     December 2005.....   6 116   43 865      360       (3)  26 002   76 340

    Thousands EUR                       Shareholders' equity

    For the year ended 31 December 2006

                         Issued    Share   Share-  Transl  Retained    Total
                        capital  premium    based   -ation earnings   equity
                                          payment reserves
                                         reserves

    As per 1
     January 2006......   6 116   43 865      360       (3)  26 002   76 340

    Net profit.........       -        -        -        -   35 316   35 316

    Translation
     reserves..........       -        -        -      (22)       -      (22)

    As per 31
     December 2006.....   6 116   43 865      360      (25)  61 318  111 634
    

    Auditors Statement from Deloitte Bedrijfsrevisoren

    "The auditor has confirmed that he has substantially completed his audit
regarding 2006 and that no material corrections are required to be made to the
financial information relating to 2006 included in this press release."

    This press release contains forward-looking information that involves
risks and uncertainties, including statements about the company's plans,
objectives, expectations and intentions. Such statements include, without
limitation, discussions concerning the company's strategic direction and new
product introductions and developments. Readers are cautioned that such
forward-looking statements involve known and unknown risks and uncertainties
that may cause actual results to differ materially than those set forth in the
forward looking statements. The risks and uncertainties include, without
limitation, the early stage of the market for connectivity and integrated
wireless products and solutions for portable and handheld computers and mobile
telephones, the management of growth, the ability of the company to develop
and successfully market new products, rapid technological change and
competition. Some of these risk factors were highlighted in the Annual Report
2005 page 35-36 and 58-59. The forward-looking statements contained herein
speak only as of the date of this press release. The company expressly
disclaims any obligation or undertaking to release publicly any updates or
revisions to any such statement to reflect any change in the company's
expectations or any change in events, conditions or circumstance on which any
such statement is based.

    Option intends to release its quarterly financial information in 2007 on
the following dates - before market hours:

    
    Q1 figures:                     Thursday April 26, 2007
    Q2 figures:                     Thursday July 26, 2007
    Q3 figures:                     Thursday October 25, 2007
    

    Annual shareholders' meeting: Friday March 30, 2007, 10 AM in Leuven
(Belgium).

    About Option (www.option.com) - EURONEXT Brussels OPTI; OTC: OPNVY Option
is the wireless technology company and is a leading innovator in the design,
development and manufacture of 3G UMTS-HSDPA, EDGE, GPRS, GSM and WLAN
technology products for wireless connectivity solutions. Option has built up a
solid reputation for creating exciting products that enhance the performance
and functionality of wireless communications. Option's headquarters are in
Leuven, Belgium. The company has Research & Development in Leuven, a Software
and Applications development centre in Adelsried (Germany), a Wireless Router
development centre in Stockholm and an ISO 9002 production engineering and
logistics facility in Cork, Ireland and sales & support offices in US, Japan,
Hong Kong and Taiwan.

    
    (1) On April 24th, 2006, the company executed a four for one stock split.
        For reporting purpose the transaction was applied retroactively.
    (2) On April 24th, 2006, the company executed a four for one stock split.
        For reporting purpose, the transaction was applied retroactively.
    (3) Non data-cards sales in Q4 2006 and December 31, 2006 were not
        exceeding the 10% threshold for segment reporting.
    




For further information:

For further information: Jan Callewaert, Founder & CEO, Frederic
Convent, CFO, Gaston Geenslaan 14, B-3001 Leuven, Belgium, TEL:
+32-(0)-16/31-74-11, FAX : +32-(0)-16/31-74-90, E-mail: investor@option.com

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