Quarterly Report • May 7, 2010
Quarterly Report
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Net Insight delivers the world's most efficient and scalable transport solution for Broadcast and IP 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 40 countries. Net Insight is quoted on the Nasdaq OMX Nordic Exchange. For more information, please visit www.netinsight.net
Net Insight AB (publ), Corporate Reg. No. 556533-4397
Our revenues in the first quarter of 2010 were significantly above revenues in Q4, 2009 and slightly above revenues in the first quarter of 2009. The revenue distribution between our core segments Broadcast Media Networks, DTT & Mobile TV and CATV/IPTV will of course vary over time. As regards Q1, 2010 I am pleased to note that the repeat business in BMN was stronger than in prevoius quarters and we are continuing to win new DTT business at a good rate. Compared with Q4, 2009 both the Americas and Asia showed slight improvements.
The business generated shows a good mix between existing and new customers. We won a couple of new DTT projects and a significant amount of business with customers operating national, regional or global contribution networks. In terms of mission critical contribution business, you may have noted our significant involvement relating to the soccer World Cup in South Africa this summer. Many key customers will bring signals from South Africa over the Nimbra platform.
We continue our build up of our resources in Sales, Marketing and R&D according to plan and the financial position remains strong.
During the quarter we have commenced the strategic task to focus our IPR and management thereof in a new wholly owned subsidiary with dedicated management. Focusing and consolidating our IPR activities in a new way will facilitate future work and opportunities relating to our IPR.
The first few months of this year have shown an increasing amount of business opportunities compared with the beginning of 2009.
Continued success for Net Insight in winning orders for Digital Terrestrial TV (DTT) networks. Four operators bought Nimbra nodes for their DTT networks of which two for new national build-outs.
Dialog Telecom, a leading broadcaster and satellite operator in Sri Lanka, selected Net Insight for a national Digital Terrestrial TV network from headend to four transmitter sites. The agreement includes two additional phases of expansion to a national DVB-T network. The solution also includes Net Insight's IP trunk solution for migration to an all-IP media network.
Net Insight received two expansion orders from Towercom, a media operator in Slovakia, for a national Digital Terrestrial TV network covering the next phases of its buildout and implementation of new services. The media operator will integrate IP data services into the same distribution network, so the Nimbra platform will facilitate seamless transport of both digital TV services as well as IP data services.
RAS (Rundfunk-Anstalt Südtirol) is a public broadcasting company providing radio/television transmission covering the South Tyrol area. In 2007 RAS incorporated a fully redundant network with Nimbra units using Net Insight's tool Nimbra Vision for network management and the Time Transfer function. RAS is now further upgrading and extending the network with six additional transmitter sites and thereby reaching over 35 transmitters.
Norkring, owned by Telenor, is Norway´s leading provider of broadcasting services, delivering infrastructure and network services to premier broadcasters and network operators, also internationally, and will build a new Digital Terrestrial TV (DTT) network in Slovenia based on Net Insight's Nimbra platform to distribute TV to transmitter stations across the country. The network will provide scalable data services and multicast capabilities.
In addition, Net Insight has received several orders within the business area Broadcast and Media Networks. There are an increasing number of telecom operators and service providers buying equipment in this quarter. The quarter also showed a number of wins related to build-outs in order to manage contribution from major events such as this summer's FIFA World Cup 2010 in South Africa.
Aldea Solutions Inc, a leading provider of International video broadcast transmission services and solutions in North America, Latin America and production facilities in
Europe, will expand their existing Nimbra network. Part of the new nodes will be used to transport live video coverage and data services from the Soccer World Cup to Aldea's customers covering this global event. Aldea is also significantly expanding their existing Nimbra network.
Net Insight received several large orders from GlobeCast, a leading global provider of content management and worldwide transmission services for professional broadcast delivery. GlobeCast ordered new Nimbra nodes to be installed for the contribution links from the 2010 FIFA World Cup to its existing and new customers. GlobeCast will also further expand its use of the Nimbra platform by implementing a major media network for one of Europe's leading TV companies. The network will handle a large amount of uncompressed and compressed video channels. A third order covers modernization and upgrading of GlobeCast's media contribution network in Paris with Nimbra 680 switches to meet new requirements of its customers, such as rapidly increased usage of HD.
One of the leading service providers in Europe will use Net Insight's Nimbra platform in a nationwide contribution network. In the new network the Nimbra equipment will provide efficient transport of uncompressed and compressed live video and audio content as well as Ethernet data services for a major sports event.
Tata Communications, India's leading global provider of communications services and one of the world's largest IP carriers has selected Net Insight's Nimbra platform to deliver a solution for an international video contribution network connecting India with major cities in the United States, Europe and Asia Pacific. The order was received in September 2009 but without customer name and customer quote.
A European media operator who operates a worldwide contribution network based on Net Insight's Nimbra platform will expand its network with new Nimbra nodes to improve video content management for its customers and meet increased customer demands for its media delivery services.
Net Insight also received an expansion order from a service provider in South Asia for its global media contribution network. The service provider runs a global media contribution network based on Net Insight's Nimbra platform to exchange media content media hubs in Asia, USA and Europe. To meet the increasing demand from customers the core network is now further expanded with Nimbra 680 switches and link capacities are upgraded to support higher-bandwidth services.
Net Insight continues to develop the partner network to support the geographic expansion and provide local presence and support to customers. Net Insight strengthened its partner network with 6 new partners in Asia, Europe, the Middle East and North America and had 35 business partners at the end of the quarter.
Net Insight participated at CabSat in Dubai, United Arab Emirates, for the second year with its own exhibition stand. It was a very successful show which offered an open meeting place for customers and partners, among them Telia Sonera International Carrier, Telenor, Telecomino, ACES and Alfadel. The company also hosted a well attended Partner meeting.
Net Insight exhibited in Lisbon, Portugal at the DVB World International Conference & Exhibition, the annual conference and exhibition dedicated to DVB standards and their implementation.
The ABU Digital Broadcasting Symposium in Kuala Lampur, Malaysia is the most important media conference in Asia. Net Insight had an exhibition stand and had also invited Alex Sharp from TATA Communications to present their Video Connect network based on the Nimbra platform. Mr. Sharp's speech was impressive and Net Insight is proud to have such a great customer reference. During the quarter TATA also agreed to a case study which is published on Net Insight's website.
Convergence India, taking place in New Delhi in India, is an event for the South Asian ICT industry where Net Insight participated through its reseller HBE:s.
The 18th China Content Broadcasting Network Expo – CCBN2010, the world's leading event of DTV and broadband network industries, took place in Beijing, China.
Net Insight participated through its resellers Century Sage Scientific (CSS) and NDT China.
After the end of the period, Net Insight introduced a new channelized IP Trunk Module and Performance monitoring capabilities on all Nimbra platforms. Access Bundles for the Nimbra 340 and Nimbra 680 series of multiservice switches were also launched.
Net Insight has been selected by ESPN, the large sports broadcaster in North America, to deliver live HD and 3D broadcast of the 2010 FIFA World Cup in South Africa. ESPN plans to cover up to 25 games in 3D for the first time in a sports network.
In April Net Insight has received two orders within Digital Terrestrial TV (DTT). Net Insight has been chosen to implement the first phase of a new nationwide Digital Terrestrial TV (DTT) network in a South American country. The second order was received from Teracom, Sweden's first media operator. The agreement covers Teracom's new nationwide all-IP/Ethernet distribution network and will be one of the first DVB-T2 networks to be deployed in the world.
During the 2010 NAB Show in April, the digital media industry event for video, audio and film, Net Insight introduced a new channelized IP Trunk Module and Performance monitoring capabilities available on all Nimbra platforms. This will enable operators to verify quality of service to end users and customers without adding costly IP external equipment.
Net Insight also introduced its Access Bundles for the Nimbra 340 and Nimbra 680 series of multiservice switches. The offering extends the scope of the Nimbra platform, allowing Net Insight to deliver technologies further into the access market.
DTT & Mobile TV 30% (45)
Net Sales for the first quarter amounted to SEK 60.5 million (60.4). Revaluation of accounts receivables in foreign currencies had a negative effect on Net Sales of SEK 2.3 million compared to a positive effect of SEK 3.6 million for the same period last year.
The EMEA region accounted for SEK 44.5 million (46.5) of total sales. The Americas showed a decline of SEK 2.4 million to SEK 10.3 million, whereas APAC delivered SEK 5.7 million (1.2).
| Q1 | Q1 | Q2 | Q3 | Q4 Full year Full year | |||
|---|---|---|---|---|---|---|---|
| Net sales per region (MSEK) | 2010 | 2009 | 2009 | 2009 | 2009 | 2009 | 2008 |
| EMEA | 44.5 | 46.5 | 51.1 | 38.2 | 41.1 | 176.8 | 136.5 |
| Americas | 10.3 | 12.7 | 8.7 | 9.7 | 6.8 | 38.0 | 80.1 |
| APAC | 5.7 | 1.2 | 2.8 | 9.6 | 4.3 | 18.0 | 57.6 |
| Total | 60.5 | 60.4 | 62.6 | 57.5 | 52.2 | 232.8 | 274.2 |
Sales in the Broadcast & Media area made up for 69% (53) of total sales and DTT & Mobile TV 30% (45). The shift from DTT to BMN is a result of the project nature of business and does not constitute a shift in trends.
Hardware revenue increased by 13.6% mainly related to greater hardware volumes in APAC. Sale of software licenses remained in line with last year whereas support and service revenue declined by 8.3%. The decline is related to lower volumes in the EMEA region. Under Other revenue, revaluation effects of the accounts receivables stock is recorded. As this effect was negative in the quarter, Other revenue declined compared to last year.
As reported in the 2009 Q4 report, from January 1, 2010, depreciation on capitalized R&D expenditures is recorded in cost of sales. This implies a shift of depreciation expenses from the profit and loss line "Development expenses" to "Cost of goods and services sold" and as such does not affect profit. Furthermore, this does not impact the Company's incremental earnings as a result of increased sales but will impact the reported Gross margin.
| SEK thousands | Q1 | Q1 |
|---|---|---|
| 2010 | 2009 | |
| Net Sales | 60 529 | 60 406 |
| Cost of Sales | -15 323 | -14 660 |
| Gross Earnings - 2009 accounting treatment | 45 206 | 45 746 |
| Gross Margin - 2009 accounting treatment | 74,7% | 75,7% |
| Cost of Sales - R&D depreciation | -5 414 | -3 407 |
| Gross earnings - 2010 accounting treatment | 39 792 | 42 339 |
| Gross margin - 2010 accounting treatment | 65,7% | 70,1% |
With a comparable treatment of depreciation of capitalized R&D expenses based on the accounting treatment applied in 2009, the gross margin declined one percentage point to 74.7 percent mainly as a result of changed product mix. The Gross margin, applying the 2010 accounting treatment of depreciation of capitalized R&D expenditures, declined by 4.4 percentage points of which increased levels of R&D depreciation accounted for 3.4 percentage points.
As shown in the income statement, page 7, the Gross margin is 65.7 percent (75.7). The difference again being mainly made up of depreciation of capitalized R&D expenditures which are charged to cost of sales in 2010.
Total operating expenses for the first quarter amounted to SEK 33.5 million (35.4). Marketing expenses have increased by SEK 5.4 million mainly following increased staffing levels and marketing efforts. Administrative expenses are lower mainly as fewer consultants have been engaged in the period. R&D expenses show a decrease of SEK 5.2 million compared to last year. The decline is mainly related to depreciation of capitalized R&D expenditures being charged to cost of sales.
Broadcast & Media 69% (53)
Operating earnings for the first quarter amounted to SEK 6.2 million (10.3), which corresponds to an Operating Margin of 10.3% (17.1)
The financial net amounted to SEK -0.2 million (-0.3).
Earnings before tax amounted to SEK 6.0 million (10.0), which corresponds to a profit margin of 9.9% (16.6).
Net income after tax amounted to SEK 64.0 million (7.2). The previously announced transaction whereby Net Insights intellectual property rights are moved to a new wholly owned limited liability company gave a positive tax and cash effect of approximately SEK 60 million, while utilizing around SEK 700 million of tax losses carried forward. As a result, Net profit margin was 105.8% (11.9).
Liquid funds at the end of the period totaled SEK 205.1 million (172.7).
Cash flow from ongoing operations for the first quarter amounted to SEK 6.2 million (11.4). The decline is mainly related to increased marketing expenditures and accounts receivables build up. The improvement in cash flow from the investment activity is related to the IPR transaction which gave a cash surplus of around SEK 60 million. Total cash flow amounted to SEK 53.1 million (20.9).
Accounts receivables at the end of the period amounted to SEK 98.3 million (68.3). 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 SEK 400.1 million (305.3) and an equity ratio of 81.4% (79.4).
Investments in tangible assets for the first quarter amounted to SEK 0.2 million (0.7) and depreciation of tangible assets amounted to SEK 0.4 million (0.3). Capitalization of development expenditures totaled SEK 12.8 million (12.7). Depreciation of capitalized development expenditures totaled SEK 5.4 million (5.3). Investments
At the end of the period, net book value of capitalized development expenditures amounted to SEK 102.7 million (75.3).
At the end of the period Net Insight had 124 (116) employees. The parent company Net Insight AB had 118 (109) employees and the US subsidiary Net Insight Inc. had 6 (7) employees.
The parent company's net turnover was SEK 66.2 million (66.0). Net income amounted to SEK 187.2 million (7.0). The large increase in Net income is related to capitalized tax losses carried forward. The capitalization equates to a utilization of approximately SEK 700 million of tax losses carried forward. Liquid funds amounted to SEK 138.6 million (171.4).
Remaining tax losses carried forward amount to SEK 246 million.
Net Insight's operation and results are impacted by a number of external and internal factors. A continuous process identifies 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 2009 have developed in the first quarter. 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 26 and 37 in the 2009 Annual report.
| Q1 | Q1 Q2'09 -Q1'10 | Full Year | ||
|---|---|---|---|---|
| Amount in SEK thousands | 2010 | 2009 | 12 mths | 2009 |
| Net Sales | 60 529 | 60 406 | 232 924 | 232 801 |
| Cost of goods & services sold | -20 737 | -14 660 | -61 042 | -54 965 |
| Gross earnings | 39 792 | 45 746 | 171 882 | 177 836 |
| Marketing expenses | -22 677 | -17 228 | -86 562 | -81 113 |
| Administration expenses | -5 205 | -7 314 | -19 342 | -21 451 |
| Development expenses | -5 666 | -10 892 | -36 044 | -41 270 |
| Other operating income | 0 | 0 | 0 | 0 |
| Operating earnings | 6 244 | 10 312 | 29 934 | 34 002 |
| Net financial items | -231 | -280 | -2 337 | -2 386 |
| Earnings before tax | 6 013 | 10 032 | 27 597 | 31 616 |
| Tax | 58 003 | -2 836 | 63 581 | 2 742 |
| Net income | 64 016 | 7 196 | 91 178 | 34 358 |
| Net income for the period attributable to the stockholders of | 64 016 | 7 196 | 91 178 | 34 358 |
| 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 | 0,16 | 0,02 | 0,23 | 0,09 |
| Earnings per share after dilution | 0,16 | 0,02 | 0,23 | 0,09 |
| Average number of shares in thousands before dilution | 389 933 | 383 283 | 389 933 | 387 616 |
| Average number of shares in thousands after dilution | 389 933 | 383 283 | 389 933 | 387 616 |
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | ||||
| Net income | 64 016 | 7 196 | 91 178 | 34 358 |
| Other comprehensive income | ||||
| Exchange rate differences | 44 | 488 | -962 | -518 |
| Total other comprehensive income | 44 | 488 | -962 | -518 |
| Total comprehensive income for the period, net after tax | 64 060 | 7 684 | 90 216 | 33 840 |
| Total comprehensive income for the period attributable to | 64 060 | 7 684 | 90 216 | 33 840 |
the stockholders of the parent company
| Q1 | Q1 | Q2'09- Q1'10 | Full year | |
|---|---|---|---|---|
| Amount in SEK thousands | 2010 | 2009 | 12 mths | 2009 |
| Ongoing operations | ||||
| Net income before tax | 6 013 | 10 032 | 27 597 | 31 616 |
| Depreciation | 6 024 | 5 529 | 25 350 | 24 855 |
| Other items not affecting liquidity | 1 002 | 862 | 4 475 | 4 335 |
| Cash flow from ongoing operations | ||||
| before change in working capital | 13 039 | 16 423 | 57 422 | 60 806 |
| Change in working capital | ||||
| Increase-/decrease+ in inventories | 2 214 | 5 171 | 509 | 3 466 |
| Increase-/decrease+ in receivables | -27 531 | -5 730 | -44 440 | -22 639 |
| Increase+/decrease- in current liabilities | 18 430 | -4 441 | 11 779 | -11 092 |
| Cash flow from ongoing operations | 6 152 | 11 423 | 25 270 | 30 541 |
| Investment activity | ||||
| Acquisitions of intangible fixed assets | -12 807 | -12 676 | -51 803 | -51 672 |
| Acquisitions of tangible fixed assets | -203 | -694 | -1 131 | -1 622 |
| Acquistion of net assets | 59 990 | 0 | 59 990 | 0 |
| Increase-/decrease+ in long-term receivables | -3 | -3 | 111 | 111 |
| Cash flow from investment activity | 46 977 | -13 373 | 7 167 | -53 183 |
| Financing activity | ||||
| New share issued - employee stock option program | 0 | 22 897 | 0 | 22 897 |
| Cash flow from financing activity | 0 | 22 897 | 0 | 22 897 |
| Increase/decrease in liquid funds | 53 129 | 20 947 | 32 437 | 255 |
| Liquid funds, opening balance | 151 999 | 151 744 | 172 691 | 151 744 |
| Liquid funds, closing balance | 205 128 | 172 691 | 205 128 | 151 999 |
| Amount in SEK thousands | Mar 31, 2010 | Mar 31, 2009 | Dec 31, 2009 |
|---|---|---|---|
| ASSETS | |||
| Intangible assets | |||
| Capitalized expenditure for development | 102 722 | 75 285 | 95 329 |
| Goodw ill | 4 354 | 4 354 | 4 354 |
| Other intangible assets | 2 077 | - | 2 257 |
| Tangible fixed assets | |||
| Equipment | 2 025 | 4 250 | 2 031 |
| Equipment for leasing | 296 | - | 517 |
| Financial assets | |||
| Deferred tax asset | 27 832 | 24 242 | 29 820 |
| Deposits paid, long-term | 251 | 362 | 248 |
| Total fixed assets | 139 557 | 108 493 | 134 556 |
| Current assets | 0 | ||
| Inventory | 24 456 | 24 965 | 26 670 |
| Customer receivables | 98 309 | 68 320 | 87 007 |
| Other receivables | 24 289 | 9 838 | 8 060 |
| Cash and bank balances | 205 128 | 172 691 | 151 999 |
| Total current assets | 352 182 | 275 814 | 273 736 |
| Total assets | 491 739 | 384 307 | 408 292 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| Shareholders' equity | |||
| Restricted shareholders' equity | |||
| Share capital | 15 597 | 15 597 | 15 597 |
| Other contributed capital | 1 192 727 | 1 199 256 | 1 192 727 |
| Translation difference | -1 204 | -242 | -1 248 |
| Accumulated deficit | -807 010 | -909 293 | -871 843 |
| Total shareholders' equity | 400 110 | 305 318 | 335 233 |
| Long-term liabilities | |||
| Long-term liabilities | 669 | 1 357 | 869 |
| Provisions | 7 520 | 5 472 | 7 299 |
| Total long-term liabilities | 8 189 | 6 829 | 8 168 |
| Current liabilities | |||
| Accounts payable | 24 185 | 15 224 | 24 259 |
| Other liabilities | 59 255 | 56 936 | 40 632 |
| Total current liabilities | 83 440 | 72 160 | 64 891 |
| Total liabilities and equity | 491 739 | 384 307 | 408 292 |
| Other | Total | ||||
|---|---|---|---|---|---|
| Share | contributed | Translation | Accumulated | shareholders' | |
| Amount in SEK thousands | capital | capital | difference | deficit | equity |
| 2009-01-01 | 15 196 | 1 170 232 | -730 | -910 224 | 274 474 |
| Total comprehensive income | - | - | 488 | 7 196 | 7 683 |
| New shares issued - employee stock options | 402 | 22 495 | - | - | 22 897 |
| Employee stock option program: | |||||
| Value of employees' services | - | - | - | 264 | 264 |
| 2009-03-31 | 15 597 | 1 192 727 | -242 | -902 764 | 305 318 |
| Total comprehensive income | - | - | -1 006 | 27 162 | 26 156 |
| New shares issued - employee stock options | - | - | - | - | - |
| Employee stock option program: | |||||
| Value of employees' services | - | - | - | 3 759 | 3 759 |
| 2009-12-31 | 15 597 | 1 192 727 | -1 248 | -871 843 | 335 233 |
| 2009-01-01 | 15 597 | 1 192 727 | -1 248 | -871 843 | 335 233 |
| Total comprehensive income | - | - | 44 | 64 016 | 64 060 |
| New shares issued - employee stock options | - | - | - | - | - |
| Employee stock option program: | |||||
| Value of employees' services | - | - | - | 817 | 817 |
| 2010-03-31 | 15 597 | 1 192 727 | -1 204 | -807 010 | 400 110 |
| SEK million | Q1 2010 | Q1 2009 | ||||||
|---|---|---|---|---|---|---|---|---|
| EMEA | APAC | AM | Total | EMEA | APAC | AM | Total | |
| Net Sales | 45 | 6 | 10 | 61 | 46 | 1 | 13 | 60 |
| Regional Contribution | 16 | -1 | 1 | 17 | 25 | -2 | 5 | 29 |
| Regional Contribution% | 37% | -10% | 13% | 28% | 54% | -133% | 41% | 47% |
| Adjusted for R&D Depreciation | 4 | 1 | 1 | 5 | ||||
| Adjusted Regional Contribution | 20 | 0 | 2 | 23 | ||||
| Adjusted Regional Contribution% | 46% | -1% | 22% | 37% | 54% | -133% | 41% | 47% |
Regional Contribution is defined as Gross earnings less Marketing expenses. AM is short for Americas. Adjusted Regional Contribution is according to 2009's accounting treatment of R&D depreciation.
| Consolidated condensed income | |||||
|---|---|---|---|---|---|
| statement and key figures, SEK m | Q1 2010 | Q1 2009 | Q2 2009 | Q3 2009 | Q4 2009 |
| Net sales | 60.5 | 60.4 | 62.6 | 57.5 | 52.2 |
| Gross earnings | 39.8 | 45.7 | 49.3 | 44.1 | 38.7 |
| Gross margin | 65.8% | 75.7% | 78.7% | 76.7% | 74.1% |
| Operating earnings | 6.2 | 10.3 | 11.0 | 10.5 | 2.2 |
| Operating margin | 10.2% | 17.1% | 17.6% | 18.2% | 4.2% |
| Pretax profit | 6.0 | 10.0 | 11.1 | 8.2 | 2.3 |
| Net income | 64.0 | 7.2 | 7.9 | 5.8 | 13.4 |
| Net margin | 105.8% | 11.9% | 12.7% | 10.1% | 25.7% |
| SEK thousands | Q1 | Q1 | Q2'09-Q1'10 | Q2 | Q3 | Q4 | Full Year |
|---|---|---|---|---|---|---|---|
| 2010 | 2009 | 12 mths | 2009 | 2009 | 2009 | 2009 | |
| Net Sales | 60 529 | 60 406 | 232 924 | 62 648 | 57 515 | 52 232 | 232 801 |
| Cost of Sales | -15 323 | -14 660 | -55 628 | -13 353 | -13 410 | -13 542 | -54 965 |
| Gross Earnings - 2009 accounting treatment | 45 206 | 45 746 | 177 296 | 49 295 | 44 105 | 38 690 | 177 836 |
| Gross Margin - 2009 accounting treatment | 75% | 76% | 76% | 79% | 77% | 74% | 76% |
| Cost of Sales - R&D depreciation | -5 414 | -3 407 | -18 232 | -3 961 | -4 095 | -4 762 | -16 225 |
| Gross earnings - 2010 accounting treatment | 39 792 | 42 339 | 159 064 | 45 334 | 40 010 | 33 928 | 161 611 |
| Gross margin - 2010 accounting treatment | 66% | 70% | 68% | 72% | 70% | 65% | 69% |
| Q1 | Q1 Q2'09 -Q1'10 | Full Year | ||
|---|---|---|---|---|
| Amount in SEK thousands | 2010 | 2009 | 12 mths | 2009 |
| Net Sales | 66 161 | 65 963 | 254 307 | 254 109 |
| Cost of goods & services sold | -24 814 | -20 303 | -82 607 | -78 096 |
| Gross earnings | 41 347 | 45 660 | 171 700 | 176 013 |
| Marketing expenses | -22 758 | -17 325 | -86 889 | -81 456 |
| Administration expenses | -5 205 | -7 314 | -19 072 | -21 181 |
| Development expenses | -5 666 | -10 892 | -36 044 | -41 270 |
| Operating earnings | 7 718 | 10 129 | 29 695 | 32 106 |
| Net financial items | -231 | -280 | -2 336 | -2 385 |
| Earnings before tax | 7 487 | 9 849 | 27 359 | 29 721 |
| Tax | 179 676 | -2 836 | 185 254 | 2 742 |
| Net income | 187 163 | 7 013 | 212 613 | 32 463 |
| Amount in SEK thousands | Mar 31, 2010 | Mar 31, 2009 | Dec 31, 2009 |
|---|---|---|---|
| ASSETS | |||
| Fixed assets | |||
| Intangible assets | |||
| Capitalized expenditures for development | 102 722 | 75 285 | 95 329 |
| Other intangible assets | 2 077 | - | 2 257 |
| Tangible fixed assets | |||
| Equipment | 2 025 | 4 250 | 2 031 |
| Equipment for leasing | 296 | - | 517 |
| Financial assets | |||
| Shares in group companies | 18 398 | 18 398 | 18 398 |
| Deferred tax asset | 209 495 | 24 242 | 29 820 |
| Deposits paid, long-term | 251 | 362 | 248 |
| Total fixed assets | 335 264 | 122 537 | 148 600 |
| Current assets | |||
| Inventory | 24 456 | 24 965 | 26 670 |
| Customer receivables | 98 309 | 68 320 | 87 007 |
| Other receivables | 18 671 | 16 751 | 8 060 |
| Cash and bank balances | 138 591 | 171 379 | 148 540 |
| Total current assets | 280 027 | 281 415 | 270 277 |
| TOTAL ASSETS | 615 291 | 403 952 | 418 877 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| Shareholders' equity | |||
| Restricted shareholders' equity | |||
| Share capital | 15 597 | 15 597 | 15 597 |
| Other contributed capital | 310 249 | 273 209 | 276 968 |
| Non-restricted equity/Accumulated deficit | 187 163 | 7 013 | 32 463 |
| Total shareholders' equity | 513 009 | 295 819 | 325 028 |
| Long term liabilities Long term liabilities |
669 | 1 357 | 869 |
| Other provisions | 7 520 | 5 472 | 7 299 |
| Total long-term liabilities | 8 189 | 6 829 | 8 168 |
| Current liabilities | |||
| Accounts payable | 24 185 | 15 224 | 24 259 |
| Liabilities, subsidaries | 24 789 | 30 775 | 22 071 |
| Other liabilities | 45 119 | 55 305 | 39 351 |
| Total liabilities | 94 093 | 101 304 | 85 681 |
| TOTAL LIABILITIES AND SHAREHOLDERS´ EQUITY | 615 291 | 403 952 | 418 877 |
| This interim report has been prepared in accordance with IAS 34 Interim Financial |
|---|
| Reporting and applicable rules in the Annual Accounts Act. The interim report for the |
| parent company was prepared in accordance with Chapter 9 of the Annual Accounts |
| Act, interim report. The accounting policies applied are consistent with those of the |
| annual financial statements for the year ended 31 December 2009, as described in |
| those annual financial statements. |
The standards, amendments to standards and interpretations that are mandatory for the first time for the financial year beginning 1 January 2010, are not currently relevant for the group.
Following a new analysis of the research and development expenses, the assessment for which projects the depreciation of capitalized expenditures should be reported as cost of goods sold and for which projects depreciation should be continued to be reported as research and development expenses, will lead to a change from January 1, 2010. This implies a shift of depreciation expenses from the profit and loss line "Development expenses" to "Cost of goods and services sold", which has no impact on profit. Furthermore, it does not impact the Company's earnings potential on incremental sales but will impact the gross margin.
The company's auditors have not examined this report
| Reporting dates | Interim report for January – June 2010: | 22 July 2010 |
|---|---|---|
| Interim report for January – September 2010: | 22 October 2010 |
Stockholm, May 7 2010
Fredrik Trägårdh Chief Executive Officer
For more information, please contact: Fredrik Trägårdh, CEO Net Insight AB, Tel: +46 (0) 8-685 0400, e-mail: [email protected]
Thomas Bergström, 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
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