Annual Report • Feb 20, 2009
Annual 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 30 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
2008 was a good year for Net Insight with several new customers in all of our core markets. We won new projects for digital terrestrial TV and mobile TV distribution networks, delivered our Nimbra platform for large media contribution projects and added new telecom operators to our customer base which also create further opportunities for IPTV/CATV business. At the same time our established customer base of globally recognized companies continued to generate a substantial volume of repeat business.
As a result, we are able to report a record year with growing sales, healthy profitability and positive cash flow. Despite the general world economic downturn we can also report a solid performance in the fourth quarter. The underlying growth of media centric networks and the demand for cost efficient and high performance media networks spur the strong development of our business.
In Asia, our business has been growing substantially during the year. Our Nimbra platform was delivered and installed under the contract with BOB (Beijing Olympic Broadcasting) for the Beijing Olympics, which was the world's largest and most mission critical TV event ever. This was a very important project for Net Insight and our network solution generated strong market interest. Digital TV is on the rise in China, the world's largest TV market. This has created new business for Net Insight and we have received our first orders for TV distribution networks in China. Our partner network further supported the momentum in Asia.
Our strong broadcast and media customer base in North America has continued to expand their media transport networks during the year. Our market position in the region was further strengthened when mediaXstream selected Net Insight for a large multiservice transport network and when a large North American telecom operator built a Nimbra based network to serve a large global media group.
In Europe several of our existing customers have not only extended their networks but also added new services such as mobile TV, radio contribution etc. We continued to win new contracts for DTT (Digital Terrestrial TV) distribution networks in Europe and also entered a new market in the dynamic Middle East region.
Our world-class customers show confidence in the Nimbra platform, we are told and we are confident that we have the right products and know-how to capitalize on the growing media transport demands in the communications industry.
There is a world economic downturn, which may also affect our part of the industry. However, with our progress in 2008, our efficient product portfolio, strong balance sheet, solid customer base and highly dedicated employees, Net Insight is well positioned, which is very encouraging for the future.
The Nimbra platform is a versatile transport solution with several unique features for digital terrestrial TV networks (DTT) networks and during the quarter Net Insight broke into new geographic market areas with new DTT orders.
In Middle East, a first small order for a larger TV distribution and media network was received, and the Chinese broadcaster Chongqing Television (CQTV) selected Net Insight to deploy a DTT network to provide efficient transport of compressed video, fast Ethernet, uncompressed audio and Gigabit Ethernet data services within the city of Chongqing.
In an East European country the national telecom operator selected the Nimbra platform to build a larger DTT network to distribute uncompressed and compressed video across the country. The network will also implement Net Insight's unique Time Transfer feature for GPS-free time synchronization.
Traffic volumes are increasing and new services are added to the media networks of the existing customer base. GlobeCast significantly expanded one of its main sites in France to meet requirements of a growing customer base, use of HD and higher traffic volumes. Driven by increasing traffic volumes, EBU placed an order to upgrade its Eurovision network. The recently introduced high capacity Nimbra 688 switches will strengthen EBU´s capabilities to meet all future requirements of its customers for real time content delivery of top sports and news events.
In North America, a large North American sports broadcaster added the Nimbra 688 to the most intensive traffic zones on its production network to manage heavy, highbandwidth traffic between its production studios. Another North American media network operator continued to expand its Nimbra network for multiple new points-ofpresence.
The Nimbra platform is a flexible multiservice solution that evolves with new service demands. Dutch KPN Broadcast Services is a longstanding customer with a multiservice media network which has been operational since the beginning of 2006 and provides services like video, data and audio connectivity between all major TVstudios in the Netherlands as well as all TV feeds for the digital terrestrial TV and KPN's mobile TV services. KPN is now deploying a new solution for TV coverage of 18 top football stadiums based on the Nimbra platform. In November KPN continued to evolve the network and added Nimbra nodes to extend its customer service offering by upgrading their FM networks. With the upgrade of the transport capabilities, fundaments are made for the future of digital radio (DAB) distribution.
Over the last two years, Norkring has been planning, building and operating the Norwegian DTT network based on Net Insight's Nimbra platform. The multi-service terrestrial media network is continuously evolving and was further developed when Norkring added national AES/EBU audio contribution from all NRK regional studios.
The Nimbra platform is not only an efficient distribution solution for DTT and Mobile TV but also for high quality media distribution in IPTV and Cable TV networks. In the US, Net Insight received an order for an IPTV virtual head-end distribution network. The Nimbra platform has several unique features for virtual head-end solutions, including redundant head-end protection switching and brings new cost-efficient business opportunities to the operator, including video-on-demand, games-ondemand, and e-commerce.
During the year, Net Insight continued to win new customers in the prioritized markets segments in Europe, North America and Asia, while the current customer base continued to generate a substantial volume of expansion orders.
In Europe, Net Insight broke into several new markets, including Ireland, where RTÉ NL selected the Nimbra platform for its national Digital Terrestrial TV distribution network, whereas Cablenet of Cyprus ordered an upgrade of its national core network transporting triple play services across the island. In Sweden, Net Insight received its first order from Teracom to interconnect its media contribution networks.
The existing European customer base continued to place extension and upgrade orders to their Nimbra networks. Swiss public broadcaster SRG built a media contribution network for the European Football Championship, while EBU (European Broadcasting Union) expanded the Eurovision Nimbra network for the TV feeds from the Olympic Games in Beijing. Telenor Satellite Broadcasting upgraded their terrestrial multiservice media network to the high-capacity Nimbra 680 switch at a number of sites to extend the capacity and to further boost the reliability of their satellites and Broadcast Service Danmark (BSD) expanded the Digital Terrestrial TV distribution network in Denmark. A public broadcaster made another DTT network expansion in southern Europe and a large European media operator expanded their transport network to network multiple satellite uplink stations.
In Asia, Net Insight strengthened its position significantly during the year. Market penetration increased with the arrival of several new customers and the successful delivery and installation of equipment for broadcasts from the Beijing Olympics proved a valuable reference case, particularly in China, where Net Insight received its first orders for DTT distribution networks, from Chongqing Television (CQTV) and another provincial broadcaster. In another Asian country, Net Insight was selected by the leading broadcaster and satellite operator to supply a Digital Terrestrial TV and Mobile TV network.
Net Insight entered other new Asian markets like Thailand, where national telecommunications provider TOT deployed a multiservice network, and Japan, where a large communications company selected Nimbra to provide services for video contribution and distribution to various operators from terrestrial broadcasters to CATV. Also in Asia, the growing customer base expanded and upgraded its Nimbra-based networks, like ST Teleport of Singapore.
In North America, Net Insight won new important customers in the US, including mediaXstream, which launched its new Nimbra-based network to carry real-time traffic for professional media companies. MediaXstream's network was expanded throughout the year to cover new sites across North America. A large North American telecom operator deployed a multiservice media network based on the Nimbra platform, to carry real-time traffic between sites in the US and Europe for a large global media group.
Existing important US customers, such as HTN and a large sports broadcaster, continued to expand their Nimbra networks throughout the year.
A global news agency network operator selected Net Insight to supply a video contribution network. This new customer delivers news content to broadcasters around the world and employs the Nimbra platform to carry video, voice and data from key sites of its global network.
Net Insight continued to develop the partner network to further support sales growth and provide local support to customers. Local representatives are highly efficient in identifying business opportunities and are instrumental in expanding market reach towards new customers and countries.
During the year, Net Insight signed up 5 new partners in Asia, Europe and the Middle East. At the end of the year, Net Insight had 29 business partners. Indirect sales represented 27% of total sales in 2008. The company will continue to expand and develop the partner network in key market areas.
During the year, Net Insight was present at a number of trade shows and exhibitions. IBC2008 in Amsterdam is Europe's largest media/broadcast fair where Net Insight exhibited the full Nimbra range. In a joint demonstration with TeliaSonera
International Carrier and DVE (Digital Video Enterprises), Net Insight showcased a live demonstration of holographic appearing telepresence. Net Insight also delivered a first-of-its kind demonstration, where uncompressed 1080p/50 video was streamed over a switched media network from Stockholm to Amsterdam. The showcases generated extensive trade press coverage and demonstrated how the Nimbra platform enables the most advanced video applications.
At the DVB World seminar in Budapest, Net Insight demonstrated the Nimbra platform for applications in DTT networks.
In the US, Net Insight participated in the NABShow2008 showcasing all Nimbra products and presented the paper "Leveling the Triple Play: Consolidating IPTV Costs Through Virtual Headends" at the Telecom2008 conference. Net Insight also exhibited at the SMPT-VSF Joint Conference in Houston in early 2008.
In Asia, Net Insight participated at CommunicAsia2008 in Singapore and exhibited the Nimbra product range and presented "GPS-free synchronization of Digital Terrestrial TV and Mobile TV distribution networks" at the conference sessions.
Net Insight's partner network exhibited the Nimbra platform at multiple trade shows throughout the year such as; the CABSAT show in Dubai, the ABE (Australian Broadcasting Exhibition) in Sydney, the KOBA 2008 (Korea Broadcast) exhibition and the Shanghai TV Festival.
The Nimbra product portfolio offers a complete range of powerful multi-service switches for access, edge and transport in video centric networks. Recently introduced products have served to strengthen the company's overall competitiveness. One example is the unique Time Transfer function, which offers a Unique Selling Point (USP) and has proven a true differentiator in customer talks.
In 2008 the Nimbra product portfolio has been supplemented with additional access and transport functionality as well as switching capacity.
In conjunction with the NAB exhibition, Net Insight introduced two new access modules for its Nimbra 600 series, expanding SD/HD-SDI interface support to also include asynchronous serial interface (ASI) and Gigabit Ethernet transport. The introduction extends Nimbra 680 versatility beyond its inherent backbone switching capabilities to include high-capacity video and data aggregation.
A new eight-port 3 Gbps Video Access Module for the Nimbra 600 series multiservice switches was introduced, enabling transport of uncompressed 1080p HD video in studio and contribution networks with 100 percent quality of service (QoS) guaranteed. The new module is also capable of delivering a mixture of 1080p, 1080i, 720p and SD signals from a single Nimbra switch, which enhances customer service flexibility.
General availability of the Nimbra 688 multi-service switch was announced in 2008. Based on the Nimbra 600 series, the Nimbra 688 switch is especially aimed at fulfilling the highest demands in terms of capacity and availability of the professional media industry, telco and CATV / IPTV networks, offering twice the access and trunk port count of Net Insight's Nimbra 680.
Significant events after the end of the period
In January, HTN continued the expansion of its extensive US network with Net Insight's Nimbra platform to support new customers.
A large European media network operator will build a new contribution network based on Net Insight's Nimbra platform to carry video from multiple sports venues across a European country.
In November, Stig Stålnacke was appointed as Global Head of Sales of Net Insight. Stig has had a long career within Cisco where he held several senior sales positions.
Outlook
The Board is pleased with the progress in 2008 and remains confident that the positive development will continue, with quarterly fluctuations, which means that the Board maintains its outlook from the third quarter 2008.
Revenue by product group (2008)
Net sales for the twelve months period increased by 20% to SEK 274.3 million (228.8). Net sales grew by 16% adjusted for exchange rate effects. Support and service revenue grew by 56%. The increase in other revenue is mainly related to leasing. Hardware revenue accounted for 65% (77) of total revenue whereas support & service revenue accounted for 13% (10) and license revenue 10% (12). Other revenue including leasing accounted for 12% (1). Positive exchange rate effects of SEK 7.9 million impacted net sales.
The EMEA region accounted for SEK 136.5 million (175.2) of total sales. The temporary decrease is mainly related to the completion of the main project with Norkring in 2007. The North America and the APAC regions both accounted for a strong growth for the twelve months period, which more than offset the lower volumes in the EMEA region. North America sales increased to SEK 80.1 million (41.0) and APAC sales increased to SEK 57.6 million (12.6). The Broadcast & Media Networks segment represented 73% (61) of total sales, Digital Terrestrial TV & Mobile-TV Networks 25% (38) and IPTV/CATV 2% (1%).
| Q4 | Q4 | Full Year | Full Year | |
|---|---|---|---|---|
| Net sales per region (MSEK) | 2008 | 2007 | 2008 | 2007 |
| EMEA | 40.0 | 41.1 | 136.5 | 175.2 |
| North America | 24.9 | 12.0 | 80.1 | 41.0 |
| APAC | 5.2 | 8.5 | 57.6 | 12.6 |
| Total | 70.1 | 58.3 | 274.2 | 228.8 |
Gross margin continued to be strong and stable at 72.4% (70.8%). Effective from January 1, 2008, accounting of cost of sold services (support, services and training expenses) was reclassified from operating expenses to direct costs of goods sold.
| Q4 | Q4 | Full Year | Full Year | |
|---|---|---|---|---|
| Comparison of gross margin | 2008 | 2007 | 2008 | 2007 |
| Gross margin incl cost of sold services | 74.7% | 69.0% | 72.4% | 68.8% |
| Gross margin excl cost of sold services | 77.4% | 71.4% | 74.5% | 70.8% |
Operating expenses for the twelve months period amounted to SEK 164.5 million (141.2), an increase by 17%. The reclassification of support, services and training expenses has affected operating expenses by SEK 5.8 million. Operating expenses before depreciation and capitalization of development expenditures increased by 11%, which was in line with the Company's growth plan for 2008. Resources have been added to sales, professional services and development. Compared to previous year the average number of employees has increased from 93 to 101. Costs for employee stock option program and provision for the long-term variable compensation program totaled SEK 14.6 million. Capitalization of development expenditures totaled SEK 44.5 million (49.0). Depreciation of capitalized development expenditures totaled SEK 45.8 million (39.2).
Other operating revenue of SEK 3.8 million (11.9) consisting of premiums for exercising of options under the employee option programs. Last year's other operating revenue consisted of acquisition of a Swedish partnership, with a net profit of SEK 9.8 million, and premiums for exercising of employee options.
Operating earnings for the twelve months period amounted to SEK 37.9 million (32.6).
The financial net amounted to SEK 3.0 million (1.3).
Net income amounted to SEK 67.9 million (34.0), including a deferred tax asset of SEK 27.1 million, which corresponds to a net profit margin of 24.8% (14.8). Net income, adjusted for one time other operating revenue and deferred tax asset, increased by 68%.
In the fourth quarter Net Insight began capitalization of its deferred tax asset by activating SEK 103 million of its tax loss carried-forward, resulting in a deferred tax asset of SEK 27.1 million. This capitalization is based on previous years results in combination with an estimated long-term positive development, but shall not be interpreted as an outlook on future earnings. The tax loss carry-forward after the capitalization is approximately SEK 894 million, which means that the potential value of the deferred tax asset is approximately SEK 235 million based on a tax rate at 26.3%.
Net sales for the fourth quarter increased by 14% to SEK 70.2 million (61.6). Positive currency effects of SEK 5.4 million impacted net sales. Software license, support, and service revenue increased to SEK 13.7 million (14,2) and accounted for 19% (20) of total revenue. The EMEA region accounted for SEK 40.0 million (40.0), North America SEK 24.9 million (8.7), and Asia SEK 5.2 million (12.6) respectively.
The gross margin for the fourth quarter was 74.7% (71.4%). This quarter was yet another quarter with strong margin continuously driven by generally good business supported by the positive currency effects.
Operating expenses for the fourth quarter totaled SEK 43.0 million (36.2). The reclassification of support, services and training expenses has affected operating expenses by SEK 1.9 million. Capitalization of development expenditures totaled SEK 13.7 million (16.3). Depreciation of capitalized development expenditures was SEK 11.5 million (11.0).
Operating earnings for the quarter amounted to SEK 9.8 million (17.7). Last year's operating earnings was impacted by the acquisition of a Swedish partnership, which brought in a profit of SEK 9.8 million.
The financial net amounted to SEK 0.6 million (0.6).
Deferred tax asset amounted to 27.1 million (0).
Net income amounted to SEK 37.5 million (18.3), which corresponds to a net profit margin at 53.0% (29.8).
Quarterly revenue and net income -20 -10 0 10 20 30 40 50 60 70 80 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 MSEK Revenue Net income Net income including other operating income Note1 Note2 2005 2006 2007 2008 Note3
Net income including deferred tax asset
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
| Cash flow and financial position |
Liquid funds at the end of the period totaled SEK 151.7 million (128.2). Cash flow from ongoing operations for the twelve months period amounted to SEK 51.5 million (98.3) whereas total cash flow amounted to SEK 23.5 million (50.6). Cash flow from ongoing operations for the fourth quarter amounted to SEK 8.4 million (56.0) whereas total cash flow amounted to SEK 18.8 million (33.9). The decrease in cash flow is mainly related to increased customer receivables due to late invoicing in the fourth quarter. Redemption of employee stock options generated SEK 21.0 million during 2008. Shareholders' equity was SEK 274.5 million (181.2) with an equity ratio of 76.7% (69.4%). On the balance sheet date, Net Insight had unutilized credit and factoring facilities of SEK 75 million. |
|---|---|
| Investments | Investments in tangible assets during the twelve months period amounted to SEK 1.2 million (2.6). Depreciation of tangible assets for the twelve months period amounted to SEK 8.2 million (2.0). Capitalized development expenditures for the twelve months period, reported as intangible assets, amounted to SEK 44.5 million (49.0). Depreciation of capitalized development expenditures was SEK 45.8 million (39.2). At the end of the period, net book value of capitalized development expenditures amounted to SEK 67.9 million (69.2). |
| Employees | At the end of the period Net Insight had 108 (98) employees. The parent company Net Insight AB had 102 (91) employees, of which four employees are based in Singapore. The US subsidiary Net Insight Inc. had 6 (7) employees. |
| Parent company | The parent company's net turnover was SEK 307.7 million (269.7). Net income amounted to SEK 61.4 million (32.3). Liquid funds amounted to SEK 149.9 million (127.0). The tax loss carry-forward after this year's capitalization is approximately SEK 894 million, which means that the potential value of the deferred tax asset is approximately SEK 235 million based on a tax rate at 26.3%. |
| Risk and sensitivity analysis |
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, customer dependence) and financial risks (including predominately currency exposure). No additional significant risks or uncertainties than those described in the annual report 2007 have developed during the twelve months period. However, the financial crisis and the global economic downturn had limited impact on Net Insight´s business during the fourth quarter. For a complete description of the Company's risk analysis and risk management, |
| please see pages 26-27 and 36 in the 2007 Annual report. |
| Q4 | Q4 | Full Year | Full Year | |
|---|---|---|---|---|
| Amount in SEK thousands | 2008 | 2007 | 2008 | 2007 |
| Net Sales | 70 171 | 61 582 | 274 305 | 228 764 |
| Cost of goods & services sold | -17 755 | -17 617 | -75 691 | -66 788 |
| Gross earnings | 52 416 | 43 965 | 198 614 | 161 976 |
| Marketing expenses | -17 183 | -17 536 | -66 689 | -64 917 |
| Administration expenses | -8 521 | -5 756 | -26 341 | -22 946 |
| Development expenses | -17 293 | -12 943 | -71 517 | -53 370 |
| Other operating income | 402 | 9 979 | 3 822 | 11 898 |
| Operating earnings | 9 821 | 17 710 | 37 889 | 32 641 |
| Net financial items | 621 | 625 | 2 973 | 1 318 |
| Earnings before tax | 10 442 | 18 335 | 40 862 | 33 959 |
| Tax | 27 078 | 0 | 27 078 | 0 |
| Net income | 37 520 | 18 335 | 67 940 | 33 959 |
| Earnings per share | 0,10 | 0,05 | 0,18 | 0,09 |
| Earnings per share after dilution | 0,10 | 0,05 | 0,18 | 0,09 |
| Average number of shares in thousands | 376 154 | 369 929 | 374 307 | 369 363 |
| Average number of shares in thousands after dilution | 379 236 | 379 287 | 379 481 | 381 472 |
| 31 Dec 2008 | 31 Dec 2007 | |
|---|---|---|
| Amount in SEK thousands | 12 months | 12 months |
| Ongoing operations | ||
| Net income before tax | 40 862 | 33 959 |
| Depreciation | 54 036 | 41 380 |
| Other items not affecting liquidity | 1 150 | 10 521 |
| Cash flow from ongoing operations | ||
| before change in working capital | 96 048 | 85 861 |
| Change in working capital | ||
| Increase-/decrease+ in inventories | -9 625 | 364 |
| Increase-/decrease+ in receivables | -42 271 | 220 |
| Increase+/decrease- in current liabilities | 7 326 | 11 834 |
| Cash flow from ongoing operations | 51 478 | 98 279 |
| Investment activity | ||
| Acquisitions of intangible fixed assets | -44 469 | -49 020 |
| Acquisitions of tangible fixed assets | -3 731 | -9 025 |
| Increase-/decrease+ in long-term receivables | -172 | -116 |
| Increase+/decrease- in long-term liabilities | -637 | 2 188 |
| Cash flow from investment activity | -49 009 | -55 973 |
| Financing activity | ||
| New share issue - employee stock option program | 21 042 | 8 245 |
| Cash flow from financing activity | 21 042 | 8 245 |
| Increase/decrease in liquid funds | 23 511 | 50 551 |
| Liquid funds, opening balance | 128 233 | 77 682 |
| Liquid funds, closing balance | 151 744 | 128 233 |
| Amount in SEK thousands | Dec 31, 2008 | Dec 31, 2007 |
|---|---|---|
| ASSETS | ||
| Fixed assets | ||
| Intangible assets | ||
| Capitalized expenditure for development | 67 864 | 69 194 |
| Goodwill | 4 354 | 4 354 |
| Tangible fixed assets | ||
| Equipment | 3 830 | 3 465 |
| Equipment for leasing | 0 | 4 864 |
| Financial assets | ||
| Deferred tax asset | 27 078 | 0 |
| Deposits paid, long-term | 359 | 187 |
| Total fixed assets | 103 485 | 82 064 |
| Current assets | ||
| Inventory | 30 136 | 20 511 |
| Customer receivables | 62 608 | 20 010 |
| Other receivables | 9 820 | 10 147 |
| Cash and bank balances | 151 744 | 128 233 |
| Total current assets | 254 308 | 178 900 |
| Total assets | 357 793 | 260 965 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | ||
| Shareholders' equity | ||
| Restricted shareholders' equity | ||
| Share capital | 15 196 | 14 828 |
| Other contributed capital | 1 176 497 | 1 153 294 |
| Translation difference | -730 | -2 478 |
| Accumulated deficit | -916 489 | -984 429 |
| Total shareholders' equity | 274 474 | 181 215 |
| Long term liabilities | ||
| Long-term liabilities | 1 551 | 2 188 |
| Provisions | 5 168 | 8 287 |
| Total provisions | 6 718 | 10 475 |
| Current liabilities | ||
| Accounts payable | 26 411 | 16 255 |
| Other liabilities | 50 190 | 53 020 |
| Total current liabilities | 76 601 | 69 275 |
| Total liabilities and equity | 357 793 | 260 965 |
| Other | Total | ||||
|---|---|---|---|---|---|
| Share | contributed | shareholders' | |||
| Amount in SEK thousands | capital | capital | Reserves | Net earnings | equity |
| 07-01-01 | 14 710 | 1 142 247 | -1 773 | -1 018 388 | 136 796 |
| Translation difference for the period | 0 | 0 | -705 | 0 | -705 |
| Total transactions reported directly in sharholders' equity | 0 | 0 | -705 | 0 | -705 |
| Net earnings | 0 | 0 | 0 | 33 959 | 33 959 |
| Total revenue/expenses for the period | 0 | 0 | -705 | 33 959 | 33 254 |
| Non-registered share capital | 4 | 256 | 0 | 0 | 260 |
| New shares issued - employee stock options | 114 | 7 871 | 0 | 0 | 7 985 |
| Employee stock option program: | |||||
| Value of employees' services | 0 | 2 920 | 0 | 0 | 2 920 |
| 07-12-31 | 14 828 | 1 153 294 | -2 478 | -984 429 | 181 215 |
| 08-01-01 | 14 828 | 1 153 294 | -2 478 | -984 429 | 181 215 |
| Translation difference for the period | 0 | 0 | 1 748 | 0 | 1 748 |
| Total transactions reported directly in sharholders' equity | 0 | 0 | 1 748 | 0 | 1 748 |
| Net earnings | 0 | 0 | 0 | 67 940 | 67 940 |
| Total revenue/expenses for the period | 0 | 0 | 1 748 | 67 940 | 69 688 |
| Non registered share-capital | 0 | 0 | 0 | 0 | 0 |
| New shares issued - employee stock options | 368 | 20 674 | 0 | 0 | 21 042 |
| Employee stock option program: | |||||
| Value of employees' services | 0 | 2 529 | 0 | 0 | 2 529 |
| 08-12-31 | 15 196 | 1 176 497 | -730 | -916 489 | 274 474 |
| Consolidated condensed income | |||||
|---|---|---|---|---|---|
| statement and key figures, SEK m | Q4 2008 | Q4 2007 | Q1 2008 | Q2 2008 | Q3 2008 |
| Net sales | 70.2 | 61.6 | 64.7 | 73.2 | 66.2 |
| Gross earnings | 52.4 | 44.0 | 44.7 | 52.2 | 49.5 |
| Gross margin | 74.7% | 71.4% | 69.0% | 71.3% | 74.8% |
| Operating earnings | 9.8 | 17.7 | 5.5 | 14.5 | 8.6 |
| Operating margin | 14.0% | 28.8% | 8.5% | 19.9% | 13.0% |
| Pretax profit | 10.4 | 18.3 | 6.2 | 15.8 | 9.1 |
| Net income | 37.5 | 18.3 | 6.2 | 15.8 | 9.1 |
| Net margin | 53.5% | 29.8% | 9.5% | 21.6% | 13.7% |
| Q4 | Q4 | Full year | Full Year | |
|---|---|---|---|---|
| Amount in SEK thousands | 2008 | 2007 | 2008 | 2007 |
| Net Sales | 77 973 | 74 083 | 307 712 | 269 730 |
| Cost of goods & services sold | -24 183 | -23 574 | -99 544 | -111 242 |
| Gross earnings | 53 789 | 50 509 | 208 167 | 158 488 |
| Marketing expenses | -17 422 | -15 866 | -67 135 | -62 768 |
| Administration expenses | -8 717 | -7 699 | -27 431 | -30 013 |
| Development expenses | -17 643 | -11 251 | -72 659 | -45 872 |
| Other operating income | 0 | 9 806 | 0 | 9 806 |
| Operating earnings | 10 008 | 25 499 | 40 943 | 29 641 |
| Net financial items | -8 935 | 2 040 | -6 605 | 2 692 |
| Earnings before tax | 1 072 | 27 539 | 34 337 | 32 333 |
| Tax | 27 078 | 0 | 27 078 | 0 |
| Net income | 28 150 | 27 539 | 61 415 | 32 333 |
| Amount in SEK thousands | Dec 31, 2008 | Dec 31, 2007 |
|---|---|---|
| ASSETS | ||
| Fixed assets | ||
| Intangible assets | ||
| Capitalized expenditures for development | 67 864 | 69 194 |
| Tangible fixed assets | ||
| Equipment | 3 830 | 3 465 |
| Equipment for leasing | 0 | 4 864 |
| Financial assets | ||
| Shares in group companies | 18 398 | 3 387 |
| Deferred tax asset | 27 078 | 0 |
| Deposits paid, long-term | 359 | 187 |
| Total fixed assets | 117 529 | 81 097 |
| Current assets | ||
| Inventory | 30 136 | 20 511 |
| Customer receivables | 62 608 | 20 010 |
| Other receivables | 9 706 | 7 859 |
| Receivable other group companies | -7 532 | 4 272 |
| Cash and bank balances | 149 880 | 126 982 |
| Total current assets | 244 799 | 179 634 |
| TOTAL ASSETS | 362 327 | 260 731 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | ||
| Shareholders' equity | ||
| Restricted shareholders' equity | ||
| Share capital | 15 196 | 14 828 |
| Other contributed capital | 180 224 | 124 685 |
| Group contribution | 8 812 | 2 092 |
| Net income | 61 415 | 32 333 |
| Total shareholders' equity | 265 646 | 173 939 |
| Long term liabilities | ||
| Long term liabilities | 1 551 | 2 188 |
| Guarantee provisions | 5 168 | 8 287 |
| Total long-term liabilities and provisions | 6 718 | 10 475 |
| Current liabilities | ||
| Accounts payable | 26 411 | 16 255 |
| Liabilities, subsidaries | 14 981 | 9 043 |
| Other liabilities | 48 571 | 51 019 |
| Total liabilities | 89 963 | 76 317 |
| TOTAL LIABILITIES AND SHAREHOLDERS´ EQUITY | 362 327 | 260 731 |
| This interim report has been prepared in accordance with International Financial |
|---|
| Reporting Standards (IFRS) and the structure follows IAS 34 Interim Financial |
| Reporting. IFRS standards and interpretations, which have been published but not |
| yet have come into effect, and are expected to have an effect on Net Insight's |
| financial reporting but not yet are applied are IFRS 8 Operating Segments and IAS 1 |
| Presentation of Financial Statements. For information on the accounting principles |
| applied, see the 2007 Annual Report. The accounting principles are unchanged, |
| compared with those applied in 2007. |
The company's auditors have not examined this report.
The Ordinary General Meeting will be held Tuesday April 28, 2009, at 10:00 a.m. in Net Insight's offices in Västberga. Shareholders who are entered in the share register kept by the Securities Register Center (VPC AB) on 22 April 2009 and apply to the Company no later than 22 April 2009 at 4:00 p.m. are entitled to attend and vote at the General Meeting. Applications to participate may be sent to the address Net Insight AB, Box 42093, 126 14 Stockholm or by telephone to +46 (0) 8685 04 00 or by fax to +46 (0) 8685 04 20 or by e-mail to [email protected].
Dividend
Reporting dates
The Board proposes that the AGM resolves that no dividend be paid for the financial year 2008.
Annual General Meeting: 28 April 2009 Interim report for January – March 2009: 13 May 2009 Interim report for January – June 2009: 28 August 2009 Interim report for January – September 2009: 22 October 2009
The annual report for 2008 is expected to be available in the company's head office mid April 2009 and will be sent to those shareholders who have requested so.
The Board of Directors and the CEO certify that the year-end report provides a true and fair picture of the income statement, the balance sheet and the cash flow statement and the explaining notes gives a true and fair view of the company's position and results, and that it describes the significant risks and uncertainties impacting the operation and the results.
Stockholm, 20 February 2009
Lars Berg Bernt Magnusson Chairman of the Board Board member
Board member Board member
Gunilla Fransson Arne Wessberg
Fredrik Trägårdh Chief Executive Officer
For more information, please contact: Fredrik Trägårdh, CEO Net Insight AB Tel.: +46 (0) 8-685 04 00, email: [email protected]
Lars Kevsjö, CFO Net Insight AB Tel.: +46 (0) 8-685 04 00, email: [email protected]
Net Insight AB Box 42093 126 14 Stockholm Tel +46 (0) 8 685 04 00 www.netinsight.net Corporate Reg. No. 556533-4397
Ragnar Bäck Clifford H Friedman
Board member Board member
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