Annual / Quarterly Financial Statement • Mar 13, 2014
Annual / Quarterly Financial Statement
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Leuven, Belgium – March 13, 2014 – Option N.V. (EURONEXT Brussels: OPTI; OTC: OPNVY), a global leader in wireless connectivity, security and experience, today announced its results for the full fiscal year ended December 31, 2013. 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.
In the M2M market, the sales cycles are typically long with lengthy pilot programs before final acceptance. This shows the importance that customers place on reliability and product quality when selecting an M2M gateway and this plays directly to Option's strengths as a company. Following final acceptance existing customers generate repeat sales with healthy margins for years to come.
To minimize strain on the company's financial resources, the cost structure of the organization was further reduced while preserving the company's core competences.
Frank Deschuytere, CEO Option commented:
"CloudGate, Option's intelligent M2M gateway, is uniquely positioned to capture the opportunities in the key M2M markets defined. The solution is highly competitive. Looking at the number of partners that have adopted the CloudGate solution, looking at the opportunities in our sales funnel and looking at the speed at which the sales cycles mature, I feel confident that this will result in a healthy top line growth in line with our plans."
The Group's balance sheet includes EUR 1.6 million in cash. The trade and other receivable position decreased from EUR 3.2 million to EUR 1.3 million and the inventory levels from EUR 4.0 million to EUR 3.4 million by the end of 2013. The intangible assets, impacted by a negative impairment of EUR 0.1 million, decreased from EUR 4.9 million in 2012 to EUR 4.0 million in 2013. The trade and other payable position decreased to EUR 8.9 million in 2013 from EUR 11.9 million by lowering our IPR accrual. The financial debt increased to EUR 8.1 million due to the issue of the convertible bond recognized at net present value.
At the end of the first quarter 2013, Option secured EUR 9.0 million via the issue of a convertible bond. The funding was subscribed by 5 partners: the Flemish investment company PMV for EUR 2.0 million, Athos Investments for EUR 1.0 million, Life Science Research Partners for EUR 0.5 million, Mondo N.V. for EUR 0.5 million and Jan Callewaert for EUR 5.0 million.
| Year ended 31 December | 2013 | 2012 |
|---|---|---|
| Thousands EUR | ||
| Revenues | 9 393 | 40 844 |
| Product Revenue | 9 199 | 13 140 |
| Software and License revenue | 194 | 27 704 |
| Cost of products sold | (6 022) | (14 940) |
| Gross Margin | 3 371 | 25 904 |
| Research and Development expenses | (6 073) | (13 425) |
| Sales, marketing and royalties expenses | ( 79) | 563 |
| Operations * | (2 031) | (1 742) |
| General and administrative expenses | (6 242) | (7 695) |
| Total Operating expenses | (14 425) | (22 299) |
| Result from operations | (11 054) | 3 605 |
| Finance costs | ( 892) | ( 170) |
| Finance income | 267 | 209 |
| Finance result-net | ( 625) | 39 |
| Profit / (loss) before income taxes | (11 679) | 3 643 |
| Income tax benefits / (expenses) | ( 24) | 9 |
| Net Result of the period attributable to the owners of the Company | (11 703) | 3 651 |
| Earnings per share | ||
| Basic weighted average number of ordinary shares | 82 498 592 | 82 498 592 |
| Diluted weighted average number of ordinary shares | 82 498 592 | 82 498 592 |
| Basic earnings / (loss) per share | (0,14) | 0,04 |
| Diluted earnings / (loss) per share | (0,14) | 0,04 |
* breakdown since 2013, earlier included in line General and administrative expenses
| 2013 | 2012 | |
|---|---|---|
| Year ended December 31 | ||
| Thousands EUR | ||
| Profit / (Loss) for the period | (11 703) | 3 651 |
| Other comprehensive income | ||
| Exchange difference arising on translation on foreign operations | ( 62) | ( 53) |
| Other comprehensive income / (loss) for the period (net of tax) | ( 62) | ( 53) |
| Total comprehensive income / (loss) for the period attributable to the owners of the parent |
(11 765) | 3 599 |
| Year ended December 31 | 2013 | 2012 |
|---|---|---|
| Thousands EUR | ||
| Assets | ||
| Intangible assets | 4 005 | 4 882 |
| Property, plant and equipment | 454 | 857 |
| Other financial assets | 1 236 | 1 195 |
| Other non-current assets | 125 | 120 |
| Total non-current assets | 5 820 | 7 055 |
| Inventories | 3 410 | 4 036 |
| Trade and other receivables | 1 350 | 3 167 |
| Cash and cash equivalents | 1 623 | 3 147 |
| Income tax receivable | 25 | 60 |
| Total current assets | 6 408 | 10 411 |
| Total assets | 12 228 | 17 466 |
| Liabilities and shareholders' equity | ||
| Issued capital | 12 232 | 12 232 |
| Share premium | 59 041 | 57 961 |
| Reserves | (1 675) | ( 893) |
| Retained earnings / (losses) | (75 446) | (64 453) |
| Total shareholders' equity attributable to the owners of the Company | (5 848) | 4 847 |
| Financial debt | 8 060 | 7 |
| Total non-current liabilities | 8 060 | 7 |
| Trade and other payables | 8 912 | 11 853 |
| Deferred revenue | 200 | 120 |
| Provisions | 395 | 580 |
| Other financial liabilities | 507 | 14 |
| Income tax payable | 1 | 45 |
| Total current liabilities | 10 016 | 12 612 |
| Total liabilities and shareholders' equity | 12 228 | 17 466 |
| Year ended December 31 | 2013 | 2012 |
|---|---|---|
| Thousands EUR | ||
| OPERATING ACTIVITIES | ||
| Net Result (A) | (11 703) | 3 651 |
| Amortisation of intangible assets | 3 548 | 4 164 |
| Depreciation of property, plant and equipment | 398 | 1 168 |
| Loss/(gains) on sale of property, plant and equipment | ( 98) | ( 118) |
| (Reversal of) write-offs on current and non current assets | (1 398) | 2 317 |
| Impairment losses on intangible assets | 104 | 3 690 |
| Increase / (decrease) in provisions | ( 119) | 106 |
| Unrealized foreign exchange losses/(gains) | 1 | ( 34) |
| Interest (income) | ( 209) | ( 126) |
| Interest expense | 705 | 66 |
| Equity settled share based payment expense | - | 4 |
| Tax expense / (benefit) | ( 9) | ( 9) |
| Total (B) | 2 923 | 11 228 |
| Cash flow from operating activities before changes in working capital (C)=(A)+(B) |
(8 780) | 14 879 |
| Decrease / (increase) in inventories | 2 023 | 383 |
| Decrease / (increase) in trade and other receivables | 2 053 | 718 |
| Increase / (decrease) in trade and other payables | (3 493) | (6 301) |
| Increase / (decrease) in deferred revenue | - | (27 008) |
| Use of provisions | ( 66) | ( 209) |
| Total changes in working capital (D) | 517 | (32 418) |
| Cash generated from operation | ||
| (E)=(C) + (D) | (8 263) | (17 539) |
| Interests and other finance costs (paid) (F) | ( 48) | ( 82) |
| Interests and other finance revenue received (G) | 58 | 223 |
| Income tax (paid)/received (H) | ( 31) | ( 4) |
| CASH FLOW FROM OPERATING ACTIVITIES (I)=(E)+(F)+(G)+(H) | (8 284) | (17 402) |
| INVESTING ACTIVITIES | ||
|---|---|---|
| Acquisition of intangible assets | - | - |
| Expenditures on product development, net of grants received | (2 788) | (3 925) |
| Investment in non-consolidated companies | ( 45) | ( 152) |
| Acquisition of property, plant and equipment | ( 20) | (1 750) |
| Acquisition of a business, net of cash disposed of | ( 7) | - |
| Proceeds from sale of property, plant and equipment | 143 | 1 181 |
| CASH FLOW USED IN INVESTING ACTIVITIES (J) | (2 717) | (4 646) |
| FINANCING ACTIVITIES | ||
| Proceeds from borrowings | 9 500 | - |
| Finance lease liabilities | ( 14) | ( 14) |
| Repayment of borrowings | - | - |
| CASH FLOW PROVIDED BY/(USED IN) FINANCING ACTIVITIES (K) | 9 486 | ( 14) |
| Cash increase/(decrease) = (I)+(J)+(K) | (1 515) | (22 062) |
| Cash and cash equivalents at beginning of year | 3 147 | 25 216 |
| Effect of foreign exchange difference | ( 9) | ( 7) |
| Cash and cash equivalents at end of year | 1 623 | 3 147 |
| Difference | (1 515) | (22 062) |
| Share | Foreign | ||||||
|---|---|---|---|---|---|---|---|
| Issued | Share | based payment |
currency translation |
Share Issue |
Retained earnings |
||
| Thousands EUR | capital | premium | reserve | reserves | costs | / (losses) | Total |
| At 1 January 2012 | 12 232 | 57 961 | 1 444 | 76 | (1 635) | (68 834) | 1 245 |
| Net result for the year | - | - | - | - | - | 3 651 | 3 651 |
| Other comprehensive loss for the year, net of income tax |
- | - | - | ( 53) | - | - | ( 53) |
| Total comprehensive loss for the year |
- | - | - | ( 53) | - | 3 651 | 3 598 |
| Share based payments | - | - | ( 726) | - | - | 730 | 4 |
| At 31 December 2012 | 12 232 | 57 961 | 720 | 23 | (1 635) | (64 453) | 4 847 |
| Net result for the year Equity component of the |
- | - | - | - | - | (11 703) | (11 703) |
| convertible loan | - | 1 078 | - | - | - | - | 1 078 |
| Transfer from/to | - | 2 | ( 2) | - | |||
| Other comprehensive loss for the year, net of income tax |
- | - | - | ( 62) | ( 1) | ( 8) | ( 70) |
| Total comprehensive loss for the | |||||||
| year | - | 1 080 | - | ( 62) | - | (11 713) | (10 695) |
| Share based payments | - | - | ( 720) | - | - | 720 | - |
| At 31 December 2013 | 12 232 | 59 041 | - | ( 39) | (1 636) | (75 446) | (5 848) |
| Revenues from external customers | Operating segment result | ||||
|---|---|---|---|---|---|
| Thousands EUR | |||||
| 2013 | 2012 | 2013 | 2012 | ||
| Devices & Solutions | 3 754 | 6 996 | 2 626 | 1 571 | |
| Embedded & Solutions | 3 462 | 6 144 | (2 070) | (4 444) | |
| M2M | 1 853 | - | ( 721) | - | |
| Licenses | - | 27 008 | - | 27 008 | |
| Other | 325 | 695 | ( 23) | (5 308) | |
| Totals | 9 394 | 40 843 | ( 188) | 18 827 | |
| Unallocated Operating Expenses | (10 865) | (15 222) | |||
| Finance (costs) / income | ( 625) | 39 | |||
| Income taxes / (expenses) | ( 24) | 9 | |||
| Net result | (11 702) | 3 653 |
Q2 results and "Interim Financial Report": Thursday August 28, 2014
Annual Shareholders Meeting: Wednesday May 28, 2014 at 10 AM in Leuven (Belgium) Q1 business update: Thursday April 24, 2014 Q3 business update: Thursday October 23, 2014
Option is currently finalizing its IFRS financial statements for the year ended 31 December 2013. The auditor has not yet completed his audit procedures as of today mainly with respect to the going concern. Should any material changes arise during the audit finalization, and additional press release will be issued. Option expects to be able to publish its fully audited Annual Financial Report for the year 2013 on or before April 25, 2014.
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 forwardlooking 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 Consolidated and Statutory Report 2012 of the Board of Directors which can be found in the Annual Report 2012. 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.
Frank Deschuytere, CEO Christine Pollie, CFO Gaston Geenslaan 14 B-3001 Leuven, Belgium TEL: +32 (0) 16 31 74 11 FAX: +32 (0) 16 31 74 90 E-mail: [email protected]
Option connects Things to the Cloud. With more than 20 years of experience and many industry's firsts in the wireless industry, the Company is ideally positioned to bring the most efficient, reliable and secure wireless solutions to business markets (B2B) and industrial markets (M2M). The Company partners with system integrators, value added resellers, application platform providers, value add distributors and network operators to bring tailor made solutions to end-customers. Option is headquartered in Belgium and maintains offices in Europe, the US, Greater China, Japan and Australia. More information: www.option.com
Copyright ©2014 OPTION. All rights reserved. All product and company names herein may be (registered) trademarks or trade names.
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