Interim / Quarterly Report • Oct 22, 2009
Interim / Quarterly Report
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Net Insight delivers the world's most efficient and scalable optical transport solution for Broadcast and Media, Digital Terrestrial TV/Mobile TV and IPTV/CATV networks.
Net Insight products truly deliver 100 percent Quality of Service with three times improvement in utilization of bandwidth for a converged transport infrastructure. Net Insight's Nimbra™ platform is the industry solution for video, voice and data, reducing operational costs by 50 percent and enhancing competitiveness in delivery of existing and new media services.
World class customers run mission critical media services over Net Insight products for more than 100 million people in more than 35 countries. Net Insight is quoted on the Stockholm Stock Exchange.
For more information, visit www.netinsight.net
Net Insight AB (publ), Corporate Reg. No. 556533-4397
At the moment our revenues are not growing and there are three main reasons; reduced (but still substantial) repeat business, no large projects in a delivery phase and investment/project decisions slipping in many markets. Despite that, we are once again able to report healthy earnings, a positive cash flow and a strong financial position supported by a strong gross margin and operating expenses according to plans.
The underlying demand and the project planning activity is high in all of our core markets. Our growing partner network is playing a vital role in winning new business and we have taken initial steps together with large system integrators being a part of their total systems and services offering.
During the quarter we have also won eight new customers and established traction in some new very large markets such as e.g. Brazil. I consider this an important confirmation of the competiveness of our Nimbra platform and a foundation for future business in these new markets. It is interesting to note that in the currently challenging market with CAPEX restraints, we are better at winning new customers and markets than before.
Much of our business is project based which means that sales across regions fluctuate over time. Both Asia Pacific and Americas are behind in terms of sales compared to last year, but have picked up pace compared to the previous quarter. New customers and expansion orders from a large telecom operator has been a positive contributor in this period.
During the quarter we have also continued to win new orders for national Digital Terrestrial TV distribution networks. In this segment our unique Time Transfer feature is one of several strong competitive differentiators.
The Nimbra platform is a world-class media transport platform for reliable, easy-tooperate infrastructure for: video, TV, audio, radio and IT traffic. It unifies any mix of transport infrastructures such as IP/Ethernet/MPLS, SONET, WDM and fiber based networks. All delivered in a true multiservice one-box solution.
I reiterate that Net Insight is well positioned and we continue to confidently drive along our strategic direction for growth in the years ahead.
During the quarter Net Insight has won eight new customers and entered seven new countries. In Latin America, Net Insight delivered an initial order to TV Globo for a point-to-point link in a Digital Terrestrial TV distribution network. An Asian telecommunications service provider is deploying a media transport solution using Net Insight's Nimbra platform. The network will interconnect a South Asian country with major cities in the US, Europe and Asia Pacific. A Chinese broadcaster ordered Nimbra equipment to a Digital TV network and also in Asia, a large communications company ordered a media contribution network from Net Insight. Canadian AldeaVision selected Net Insight to strengthen its international video transmissions. The Nimbra platform will increase their existing features and capacity while providing a smooth migration from their existing network and serve their customers across North and Latin America. During the quarter, Net Insight was selected for a new national DTT network. An East European media operator will base the rollout on the Nimbra platform to distribute uncompressed and compressed video across the country. The network will also incorporate Net Insight's unique Time Transfer feature.
Our repeat business has somewhat declined during the quarter, but is still substantial. Among our large European customers, network expansions and upgrades have continued. The Estonian media network operator Levira, ordered a major upgrade and expansion of their Nimbra-based network for contribution, production and distribution of Digital Terrestrial TV. A European media network operator further extended its international media network across Eastern Europe. A Nimbra based contribution network was delivered to a public radio and TV broadcaster in Europe. The existing network is expanded to include a new studio facility interconnected to the central site by the high-capacity Nimbra 680 switch with its multi-purpose Video Access module and the Gigabit Ethernet card. In North America, a large sports broadcaster expanded its media network to accommodate increasing demand from customers. A major Chinese broadcaster expanded its media contribution network with additional international links to cater for traffic growth.
The Nimbra platform is an efficient and reliable media transport platform for live event video transport applications. A European broadcaster selected Net Insight's to supply equipment for a contribution network to carry video feeds from the Vancouver 2010 Olympic Winter games. The network will carry video, audio and data feeds from multiple sites in Canada over a fiber link to Europe, which will be the broadcaster's first international transmission of, live uncompressed HD streams.
Net Insight continues to develop the partner network to further support sales growth and provide local support to customers. During the quarter the partner network, including recently added partners, has played an important role in large new customer wins and to establish a presence in new geographic markets.
At the IBC2009 exhibition in Amsterdam Net Insight demonstrated the full Nimbra range with a unique combination of QoS, scalability and flexibility including world leading DTT transport solutions, multi-service contribution for the Broadcast & Media industry and IPTV and CATV networks. Net Insight recorded an increased number of visitors to the booth and high quality level of the leads generated. Net Insight exhibited under the communications theme "Always, always, always coming through with 100% Quality of Service. Guaranteed."
For the first time, Net Insight exhibited at the SET 2009, Broadcast & Cable show in Sáo Paulo, Brazil and our business partners CSS and NDT showcased Nimbra equipment at the BIRTV exhibition in Beijing, China. At this show, NDT was awarded the BIRTV Award for "Chongqing TV Station Nimbra Multiservice Distribution System". In 2008, Chongqing Television (CQTV) selected the Nimbra platform to a Digital Terrestrial TV network.
New product introductions
The recently introduced IP/Ethernet Trunk Module is an important product to both existing and new customers for enhanced handling of IP/Ethernet traffic. This new Nimbra Module is now installed in multiple pilot networks providing operators with the option to create next generation media networks over existing IP, SDH/SONET, WDM or fiber.
Outlook
Despite lower revenues in the third quarter 2009 compared with the same quarter 2008, the Board foresees positive developments, with quarterly fluctuations. As of the end of this year, the Board will cease to give quarterly outlooks.
Net sales for the nine months period amounted to SEK 180.6 million (204.1) representing a decline of 11.5%. Currency effects of SEK -2.2 million (2.5) have impacted net sales and income negatively. Hardware revenue increased by 6% in the period mainly related to greater volumes in EMEA. Software licenses declined 26% mainly due to lower volumes in the Americas and EMEA. Support and service revenue continues to grow and shows an increase of 7%. The growth comes predominately from the EMEA region. Other revenue declined by 96% as the leasing set-up with Beijing Olympic Games last year was recorded under this heading.
The EMEA region accounted for SEK 135.8 million (96.5) of total sales. The improvement is mainly related to geographical expansion. The Americas region recorded a decline in sales to SEK 31.1 million (55.2). APAC has still not fully made up for last year's large order intake and is recording a sales drop to SEK 13.7 million (52.5).
The Gross margin remains stable at a strong level of 77.1% (71.6) withstanding negative currency effects and competitive price pressure.
Total operating expenses for the nine months period amounted to SEK 107.3 million (121.0). The lower expense levels are driven by changes in the depreciation period for capitalized development expenditures from three years to five years based on a reassessment concerning the expected useful life of the products. The extension to five years has affected the results positively by SEK 18.6 million in the nine months period compared to the depreciation period of three years. Marketing expenses increased according to plan mainly related to hiring of sales, pre-sales and customer support staff. Administrative expenses are in line with previous period.
Operating earnings for the nine months period amounted to SEK 31.8 million (28.6). Last year's operating earnings was affected by other operating revenue of SEK 3.4 million for exercise of options under the employee option programs.
The financial net amounted to SEK –2.5 million (2.4). The negative financial net is explained by realized and unrealized currency losses in Euro and US Dollar, in combination with lower interest rates on short term investments.
Net income before tax amounted to SEK 29.3 million (31.0), which corresponds to a profit margin of 16.2% (15.2).
Net income after tax amounted to SEK 20.9 million (31.0). This year's net income is charged with tax as a result of the activated deferred tax asset in the 2008 year-end closing. The tax expense amounted to SEK 8.4 million (0). This tax expense has no cash flow effect.
Net profit margin was 11.6% (15.2). Adjusted for tax expenses, the net profit margin was 16.2% (15.2).
Net sales for the third quarter decreased by 13% to SEK 57.5 million (66.2). The Swedish krona strengthened against USD and EUR in the quarter, which resulted in a negative currency effect of SEK -3.3 million (3.3). The shortfall versus last year is related to APAC and the Americas in combination with unfavorable exchange rate variations.
The Broadcast & Media Networks solution areas represented 75% (72%) and Digital Terrestrial TV & Mobile-TV Networks 25% (28%).
| Q3 | Q3 | Q4 | Q1 | Q2 | Q408-Q309 | Full year | |
|---|---|---|---|---|---|---|---|
| Net sales per region (MSEK) | 2009 | 2008 | 2008 | 2009 | 2009 | 12 months | 2008 |
| EMEA | 38.2 | 32.3 | 40.0 | 46.5 | 51.1 | 175.8 | 136.5 |
| Americas | 9.7 | 15.2 | 24.9 | 12.7 | 8.7 | 56.0 | 80.1 |
| APAC | 9.6 | 18.7 | 5.2 | 1.2 | 2.8 | 18.8 | 57.6 |
| Total | 57.5 | 66.2 | 70.1 | 60.4 | 62.6 | 250.6 | 274.2 |
The gross margin for the third quarter was 76.7% (74.8).
Operating expenses for the third quarter amounted to SEK 33.6 million (38.9).
The extension to five years depreciation period for capitalized development expenditures has affected the results positively by SEK 5.8 million in the three months period compared to the depreciation period of three years. The increase in marketing expenses is mainly explained by recruitments to sales, pre-sales and customer support.
Operating earnings for the quarter amounted to SEK 10.5 million (8.6).
The financial net amounted to SEK -2.3 million (0.4). The negative financial net is explained by realized and unrealized currency losses in Euro and US Dollar, in combination with lower interest rates on short term investments.
Net income before tax amounted to SEK 8.2 million (9.1), which corresponds to a profit margin of 14.2% (13.7).
Revenue Net income Net income including other operating income
Net income including deferred tax asset of 27.1 MSEK
Note1: Adjusted for other operating revenue of SEK 13.5 million, net income in Q4 2006 was SEK 3.4 million. Note2: Adjusted for other operating revenue of SEK 10.0 million, net income in Q4 2007 was SEK 8.3 million. Note3: Including a deferred tax asset of 27.1 MSEK
Liquid funds at the end of the period totaled SEK 155.8 million (133.0).
Cash flow from ongoing operations for the nine months period amounted to SEK 20.8 million (43.1). The decline is mainly related to lower sales volumes and increased marketing expenditures in combination with other operating income in the previous period. Total cash flow amounted to SEK 4.0 million (4.7).
Cash flow from ongoing operations for the third quarter amounted to SEK 29.4 million (21.6). Total cash flow for the third quarter amounted to SEK 17.6 million (14.0). The positive cash flow is mainly related to favorable changes in working capital.
Accounts receivables at the end of the period amount to SEK 90.6 million (42.2). The increase comes as a result of sales recorded later in the period and a general trend towards longer payment terms.
Shareholders' equity amounted to SEK320.2 million (224.0) with an equity ratio of 80.9% (78.5%).
Investments in tangible assets for the nine months period amounted to SEK 1.6 million (12.7) and depreciation of tangible assets amounted to SEK 0.8 million (8.0). Capitalization of development expenditures totaled SEK 37.6 million (30.8). Depreciation of capitalized development expenditures totaled SEK 16.8 million (34.3). Investments
Investments in tangible assets during the third quarter reached SEK 0.5 million (0.5). Depreciation of tangible assets amounted to SEK 0.3 million (4.2). Capitalized development expenditures for the third quarter, reported as intangible assets,
amounted to SEK 11.2 million (8.4). Depreciation of capitalized development expenditures was SEK 6.0 million (11.5).
At the end of the period, net book value of capitalized development expenditures amounted to SEK 88.8 million (65.7).
Employees
At the end of the period Net Insight had 121 (102) employees. The parent company Net Insight AB had 115 (96) employees and the US subsidiary Net Insight Inc. had 6 (6) employees.
The parent company's net turnover was SEK 196.5 million (229.7). Net income amounted to SEK 18.7 million (33.3). Liquid funds amounted to SEK 154.6 million (131.0).
The tax loss carry-forward is approximately SEK 970 million, which means that the potential value of the deferred tax asset is approximately SEK 255 million based on a tax rate of 26.3%.
Net Insight's operation and results are impacted by a number of external and internal factors. A continuous process identifies all existing risks and assesses how each risk shall be managed and mitigated.
The risks to which the company is exposed are divided into market related risks (including competition, technology development, political risks), operational risks (including product liability, intellectual property rights, litigation, and customer dependence) and financial risks (including predominately currency exposure).
No additional significant risks or uncertainties than those described in the annual report 2008 have developed in the nine months period. However, the global economic downturn has meant that business decisions as well as customer payments are sometimes delayed.
For a complete description of the Company's risk analysis and risk management, see page 27 and 37 in the 2008 Annual report.
| Q3 | Q3 | Jan-Sep | Jan-Sep | Q408-Q309 | Full Year | |
|---|---|---|---|---|---|---|
| Amount in SEK thousands | 2009 | 2008 | 2009 | 2008 | 12 months | 2008 |
| Net Sales | 57 515 | 66 193 | 180 569 | 204 134 | 250 740 | 274 305 |
| Cost of goods & services sold | -13 410 | -16 712 | -41 423 | -57 936 | -59 178 | -75 691 |
| Gross earnings | 44 105 | 49 481 | 139 146 | 146 198 | 191 562 | 198 614 |
| Marketing expenses | -19 743 | -14 858 | -58 644 | -48 925 | -76 408 | -66 689 |
| Administration expenses | -5 050 | -5 522 | -17 979 | -17 820 | -26 500 | -26 341 |
| Development expenses | -8 831 | -18 503 | -30 719 | -54 223 | -48 013 | -71 517 |
| Other operating income | 0 | -1 989 | 0 | 3 419 | 403 | 3 822 |
| Operating earnings | 10 481 | 8 609 | 31 804 | 28 649 | 41 044 | 37 889 |
| Net financial items | -2 308 | 443 | -2 504 | 2 350 | -1 881 | 2 973 |
| Earnings before tax | 8 173 | 9 052 | 29 300 | 30 999 | 39 163 | 40 862 |
| Tax | -2 364 | 0 | -8 352 | 0 | 18 726 | 27 078 |
| Net income | 5 809 | 9 052 | 20 948 | 30 999 | 57 889 | 67 940 |
| Net income for the period attributable to the stockholders | 5 809 | 9 052 | 20 948 | 30 999 | 57 889 | 67 940 |
| of the parent company | ||||||
| Earnings/loss per share , based on net profit attributable | ||||||
| to the Parent Company's shareholders during the period | ||||||
| (in SEK per share) | ||||||
| Earnings per share before dilution | 0,01 | 0,02 | 0,05 | 0,08 | 0,15 | 0,18 |
| Earnings per share after dilution | 0,01 | 0,02 | 0,05 | 0,08 | 0,15 | 0,18 |
| Average number of shares in thousands before dilution | 389 933 | 374 522 | 386 920 | 373 806 | 383 012 | 374 307 |
| Average number of shares in thousands after dilution | 389 933 | 381 580 | 386 920 | 381 537 | 383 012 | 379 481 |
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | ||||||
| Other comprehensive income | ||||||
| Exchange rate differences | -645 | 887 | -716 | 426 | 606 | 1 748 |
| Total other comprehensive income | -645 | 887 | -716 | 426 | 606 | 1 748 |
| Total comprehensive income for the period, net after tax | 5 164 | 9 939 | 20 232 | 31 425 | 58 495 | 69 688 |
| Total comprehensive income for the period attributable to | 5 164 | 9 939 | 20 232 | 31 425 | 58 495 | 69 688 |
the stockholders of the parent company
| 30 Sep 2009 | 30 Sep 2008 | 30 Sep 2009 | 30 Sep 2008 | Q308-Q209 | 31 dec 2008 | |
|---|---|---|---|---|---|---|
| Amount in SEK thousands | 3 months | 3 months | 9 months | 9 months | 12 months | 12 months |
| Ongoing operations | ||||||
| Net income before tax | 8 173 | 9 052 | 29 300 | 30 999 | 39 163 | 40 862 |
| Depreciation | 6 325 | 15 748 | 17 590 | 42 271 | 29 355 | 54 036 |
| Other items not affecting liquidity | 1 037 | 1 747 | 2 843 | 693 | 3 300 | 1 150 |
| Cash flow from ongoing operations | ||||||
| before change in working capital | 15 535 | 26 547 | 49 733 | 73 963 | 71 818 | 96 048 |
| Change in working capital | ||||||
| Increase-/decrease+ in inventories | -204 | -562 | 8 710 | 2 659 | -3 574 | -9 625 |
| Increase-/decrease+ in receivables | 8 509 | 10 550 | -29 647 | -18 356 | -53 562 | -42 271 |
| Increase+/decrease- in current liabilities | 5 553 | -14 949 | -8 057 | -15 180 | 14 449 | 7 326 |
| Cash flow from ongoing operations | 29 393 | 21 586 | 20 739 | 43 086 | 29 131 | 51 478 |
| Investment activity | ||||||
| Acquisitions of intangible fixed assets | -11 232 | -8 428 | -37 644 | -30 778 | -51 335 | -44 469 |
| Acquisitions of tangible fixed assets | -527 | -485 | -1 612 | -12 650 | 7 307 | -3 731 |
| Increase-/decrease+ in long-term receivables | 114 | -24 | 136 | -77 | 41 | -172 |
| Increase+/decrease- in long-term liabilities | -181 | 0 | -480 | -4 255 | 3 138 | -637 |
| Cash flow from investment activity | -11 826 | -8 936 | -39 600 | -47 760 | -40 849 | -49 009 |
| Financing activity | ||||||
| New share issue - employee stock option program | 0 | 1 352 | 22 897 | 9 417 | 34 522 | 21 042 |
| Cash flow from financing activity | 0 | 1 352 | 22 897 | 9 417 | 34 522 | 21 042 |
| Increase/decrease in liquid funds | 17 567 | 14 002 | 4 036 | 4 743 | 22 804 | 23 511 |
| Liquid funds, opening balance | 138 213 | 118 974 | 151 744 | 128 233 | 132 976 | 128 233 |
| Liquid funds, closing balance | 155 780 | 132 976 | 155 780 | 132 976 | 155 780 | 151 744 |
| Amount in SEK thousands | Sep 30, 2009 | Sep 30, 2008 | Dec 31, 2008 |
|---|---|---|---|
| ASSETS | |||
| Fixed assets | |||
| Intangible assets | |||
| Capitalized expenditure for development | 88 762 | 65 702 | 67 864 |
| Goodwill | 4 354 | 4 354 | 4 354 |
| Tangible fixed assets | |||
| Equipment | 4 597 | 4 046 | 3 830 |
| Equipment for leasing | 0 | 8 932 | 0 |
| Financial assets | |||
| Deferred tax asset | 18 726 | 0 | 27 078 |
| Deposits paid, long-term | 223 | 264 | 359 |
| Total fixed assets | 116 662 | 83 298 | 103 485 |
| Current assets | |||
| Inventory | 21 426 | 17 852 | 30 136 |
| Customer receivables | 90 579 | 42 219 | 62 608 |
| Other receivables | 11 496 | 8 906 | 9 820 |
| Cash and bank balances | 155 780 | 132 976 | 151 744 |
| Total current assets | 279 281 | 201 953 | 254 308 |
| Total assets | 395 943 | 285 251 | 357 793 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| Shareholders' equity | |||
| Restricted shareholders' equity | |||
| Share capital | 15 597 | 15 006 | 15 196 |
| Other contributed capital | 1 201 638 | 1 164 430 | 1 176 497 |
| Accumulated deficit | -896 987 | -955 482 | -917 219 |
| Total shareholders' equity | 320 248 | 223 954 | 274 474 |
| Long-term liabilities | |||
| Long-term liabilities | 1 071 | 2 188 | 1 551 |
| Provisions | 6 080 | 4 864 | 5 168 |
| Total long-term liabilities | 7 151 | 7 052 | 6 718 |
| Current liabilities | |||
| Accounts payable | 21 705 | 10 681 | 26 411 |
| Other liabilities | 46 839 | 43 564 | 50 190 |
| Total current liabilities | 68 544 | 54 245 | 76 601 |
| Total liabilities and equity | 395 943 | 285 251 | 357 793 |
| SEK Million | Q3 2009 | Q3 2008 | Jan‐Sep 2009 | Jan‐Sep 2008 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| EMEA | APAC | AM | Total EMEA | APAC | AM | Total EMEA | APAC | AM | Total EMEA | APAC | AM | Total | ||||
| Net Sales | 38 | 10 | 10 | 58 | 33 | 19 | 13 | 66 | 135 | 14 | 31 | 181 | 97 | 53 | 54 | 204 |
| Regional Contribution | 19 | 2 | 4 | 24 | 18 | 9 | 7 | 35 | 69 | 0 | 12 | 81 | 51 | 17 | 30 | 97 |
| Regional Contribution% | 50% | 19% | 37% | 42% | 55% | 46% | 54% | 52% | 51% | ‐3% | 39% | 45% | 52% | 32% | 55% | 48% |
Regional Contribution is defined as Gross earnings less Marketing expenses. AMis short for Americas
| Other | Total | |||
|---|---|---|---|---|
| Share | contributed | shareholders' | ||
| Amount in SEK thousands | capital | capital | Net earnings | equity |
| 08-01-01 | 14 828 | 1 153 294 | -986 907 | 181 215 |
| Total comprehensive income | 0 | 0 | 31 425 | 31 425 |
| Non-registered share capital | 7 | 589 | 0 | 596 |
| New shares issued - employee stock options | 171 | 8 650 | 0 | 8 821 |
| Employee stock option program: | ||||
| Value of employees' services | 0 | 1 897 | 0 | 1 897 |
| 08-09-30 | 15 006 | 1 164 430 | -955 482 | 223 954 |
| Total comprehensive income | 0 | 0 | 38 263 | 38 263 |
| Non-registered share capital | 0 | 0 | 0 | 0 |
| New shares issued - employee stock options | 190 | 11 435 | 0 | 11 625 |
| Employee stock option program: | ||||
| Value of employees' services | 0 | 632 | 0 | 632 |
| 08-12-31 | 15 196 | 1 176 497 | -917 219 | 274 474 |
| 09-01-01 | 15 196 | 1 176 497 | -917 219 | 274 474 |
| Total comprehensive income | 0 | 0 | 20 232 | 20 232 |
| New shares issued - employee stock options | 402 | 22 495 | 0 | 22 897 |
| Employee stock option program: | ||||
| Value of employees' services | 0 | 2 645 | 0 | 2 645 |
| 09-09-30 | 15 597 | 1 201 638 | -896 987 | 320 248 |
| Consolidated condensed income | |||||
|---|---|---|---|---|---|
| statement and key figures, SEK m | Q3 2009 | Q3 2008 | Q4 2008 | Q1 2009 | Q2 2009 |
| Net sales | 57.5 | 66.2 | 70.2 | 60.4 | 62.6 |
| Gross earnings | 44.1 | 49.5 | 52.4 | 45.7 | 49.3 |
| Gross margin | 76.7% | 74.8% | 74.7% | 75.7% | 78.7% |
| Operating earnings | 10.5 | 8.6 | 9.8 | 10.3 | 11.0 |
| Operating margin | 18.2% | 13.0% | 14.0% | 17.1% | 17.6% |
| Pretax profit | 8.2 | 9.1 | 10.4 | 10.0 | 11.1 |
| Net income | 5.8 | 9.1 | 37.5 | 7.2 | 7.9 |
| Net margin | 10.1% | 13.7% | 53.5% | 11.9% | 12.7% |
| Q3 | Q3 | Jan-Sep | Jan-Sep | Q408-Q309 | Full Year | |
|---|---|---|---|---|---|---|
| Amount in SEK thousands | 2009 | 2008 | 2009 | 2008 | 12 months | 2008 |
| Net Sales | 62 248 | 75 110 | 196 458 | 229 739 | 274 431 | 307 712 |
| Cost of goods & services sold | -19 502 | -21 563 | -59 602 | -75 361 | -83 785 | -99 544 |
| Gross earnings | 42 746 | 53 547 | 136 856 | 154 378 | 190 645 | 208 167 |
| Marketing expenses | -19 821 | -15 317 | -58 919 | -49 713 | -76 341 | -67 135 |
| Administration expenses | -4 986 | -6 416 | -17 709 | -18 714 | -26 426 | -27 431 |
| Development expenses | -8 831 | -19 295 | -30 719 | -55 016 | -48 362 | -72 659 |
| Operating earnings | 9 108 | 12 519 | 29 509 | 30 935 | 39 517 | 40 943 |
| Net financial items | -2 307 | 437 | -2 503 | 2 330 | -11 438 | -6 605 |
| Earnings before tax | 6 801 | 12 955 | 27 006 | 33 265 | 28 078 | 34 337 |
| Tax | -2 365 | 0 | -8 352 | 0 | 18 726 | 27 078 |
| Net income | 4 436 | 12 955 | 18 654 | 33 265 | 46 804 | 61 415 |
| Amount in SEK thousands | Sep 30, 2009 | Sep 30, 2008 | Dec 31, 2008 |
|---|---|---|---|
| ASSETS | |||
| Fixed assets | |||
| Intangible assets | |||
| Capitalized expenditures for development | 88 762 | 65 702 | 67 864 |
| Tangible fixed assets | |||
| Equipment | 4 597 | 4 046 | 3 830 |
| Equipment for leasing | 0 | 8 932 | 0 |
| Financial assets | |||
| Shares in group companies | 18 398 | 3 387 | 18 398 |
| Deferred tax asset | 18 726 | 0 | 27 078 |
| Deposits paid, long-term | 223 | 264 | 359 |
| Total fixed assets | 130 706 | 82 331 | 117 529 |
| Current assets | |||
| Inventory | 21 425 | 17 852 | 30 136 |
| Customer receivables | 90 579 | 42 218 | 62 608 |
| Other receivables | 11 496 | 8 528 | 9 706 |
| Receivable other group companies | 21 198 | 22 121 | 0 |
| Cash and bank balances | 154 596 | 131 013 | 149 880 |
| Total current assets | 299 294 | 221 732 | 252 330 |
| TOTAL ASSETS | 430 000 | 304 063 | 369 859 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| Shareholders' equity | |||
| Restricted shareholders' equity | |||
| Share capital | 15 597 | 15 006 | 15 196 |
| Other contributed capital | 266 779 | 168 156 | 180 224 |
| Group contribution | 8 812 | 2 092 | 8 812 |
| Non-restricted equity/Accumulated deficit | 18 654 | 33 265 | 61 415 |
| Total shareholders' equity | 309 842 | 218 519 | 265 646 |
| Long term liabilities | |||
| Long term liabilities | 1 071 | 2 188 | 1 551 |
| Guarantee provisions | 6 080 | 4 864 | 5 168 |
| Total long-term liabilities | 7 151 | 7 052 | 6 719 |
| Current liabilities | |||
| Accounts payable | 21 705 | 10 682 | 26 411 |
| Liabilities, subsidaries | 46 374 | 25 564 | 22 513 |
| Other liabilities | 44 928 | 42 246 | 48 571 |
| Total liabilities | 113 007 | 78 492 | 97 495 |
| TOTAL LIABILITIES AND SHAREHOLDERS´ EQUITY | 430 000 | 304 063 | 369 859 |
This interim report has been prepared in accordance with International Financial Reporting Standards (IFRS) and the structure follows IAS 34 Interim Financial Reporting. Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2008, as described in those annual financial statements. The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 January 2009.
IAS 1 (revised), Presentation of financial statements. The revised standard prohibits the presentation of items of income and expenses (that is 'non-owner changes in equity') in the statement of changes in equity, requiring 'non-owner changes in equity' to be presented separately from owner changes in equity. All 'non-owner changes in equity' are required to be shown in a performance statement. Entities can choose whether to present one performance statement (the statement of comprehensive income) or two statements (the income statement and statement of comprehensive income). The group has elected to present an income statement and a statement of comprehensive income.
IFRS 8, Operating segments. IFRS 8 replaces IAS 14, 'Segment reporting'. It requires a 'management approach' under which segment information is presented on the same basis as that used for internal reporting purposes. This has resulted in that the following segments are presented in the financial statement, EMEA, North America and APAC. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker has been identified as the Chief Executive Officer that makes strategic decisions.
IAS 23, Borrowing costs. The revised standard requires that borrowing costs related to construction of qualifying assets have to be capitalized as part of the cost of acquisition. Currently the company has no borrowings why the implementation of the standard currently has no practical effect.
The other standards, amendments to standards and interpretations that are mandatory for the first time for the financial year beginning 1 January 2009, are not currently relevant for the group.
This interim report has been reviewed by the auditors.
The Chairman of the Board of Directors of Net Insight AB, in consultation with the four largest shareholders (voting rights), has established a nomination committee. Net Insight's nomination committee for the 2010 Annual General Meeting consists of Clifford H. Friedman (Constellation Growth Capital), Lars Bergkvist (Lannebo Fonder), Ingemar Syréhn (Swedbank Robur fonder), Peter Lindell (AMF - Försäkring och Fonder) and Lars Berg (Chairman of the Net Insight Board and European Venture Partner Constellation Growth Capital). The nomination committee appointed Lars Berg to serve as Chairman of the Committee.
The nomination committee's task is to present proposals prior to the General Meeting in regards to the Chairman of the Board of Directors and members of the Board of Directors, as well as fees and other remuneration to each member of the board. The nomination committee is also to make proposals on the election and remuneration of the company auditor.
Shareholders wishing to make proposals to the nomination committee can do so by e-mail to: [email protected].
Year-end report 2009: 19 February 2010 Annual General Meeting 29 April 2010 Interim report for January – March 2010: 7 May 2009
Stockholm, 22 October 2009
For more information, please contact: Fredrik Trägårdh, CEO Net Insight AB, Tel: +46 (0) 8-685 0400, [email protected] Thomas Bergström, CFO, Net Insight AB Tel.: +46 (0) 8-685 04 00, email:[email protected]
Net Insight AB (Corporate Reg. No. 556533-4397) Box 42093, 126 14 Stockholm, Tel +46 (0) 8 685 04 00, www.netinsight.net
We have reviewed this report for the period 1 January 2009 to 30 September 2009 for Net Insight AB (publ). The board of directors and the CEO are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
We conducted our review in accordance with the Swedish Standard on Review Engagements SÖG 2410, Review of Interim Report Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing in Sweden, RS, and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company.
Stockholm, 22 October 2009
ÖhrlingsPricewaterhouseCoopers
Sten Håkansson Authorised Public Accountant
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