•Net sales in the first nine months amounted to MSEK 152 (142). Third quarter
net sales were MSEK 57 (35).
•The gross margin for January-September was 66% (69) and the gross profit was
MSEK 100 (98). The third quarter gross margin was 62% (71) and the gross profit
was MSEK 35 (25).
•Earnings before depreciations and amortizations (EBITDA) in the first nine
months 2010 were MSEK -22 (-12). In the third quarter it was MSEK 3 (-15).
•The result after tax for the nine month period was MSEK -63 (-23) and for the
third quarter MSEK -28 (-20).
•Earnings per share for the first nine months 2010 were SEK -0.49 (-0.18).
Third quarter earnings per share amounted to SEK -0.22 (-0.15).
•The cash flow during the nine months period was MSEK -17 (-4). Third quarter
cash flow was MSEK -15 (-13).
Third Quarter Summary 2010
•Net sales increased by 63%, to MSEK 57.
•Restructuring program aiming to reduce costs by 25% announced in October.
•Capitalized development costs written down by MSEK 23.
Comments by Torgny Hellström, CEO
Third quarter net sales 2010 amounted to MSEK 57 (35), corresponding to a 63%
growth compared to the same quarter last year. This is the third best quarterly
sales ever, primarily due to good sales in Technology & Licensing and recovered
sales by C Technologies. In spite of the improvement we still generate loss
before write down of certain Capitalized Development costs and a negative cash
flow. Consequently, aiming at a positive result and a positive cash flow by mid
next year, we are working to reduce Anoto's operational costs by approx. MSEK
40 (25%).
We will increase our efficiency by concentrating all development resources into
one organization in Lund, and by streamlining Anoto's product portfolio. Anoto
will focus on growing its business through existing and new partners developing
their own platforms and products based on Anoto technology. The development of
Anoto's platform AFS has been halted, since the sales have not met our
expectations. However, Anoto will continue to fully support customers that have
invested in the AFS platform.
After the end of the third quarter in early October we announced a
restructuring program aiming to get Anoto into profitability and positive cash
flow next year. The restructuring will reduce our staff by 30-35 full time
employees in Sweden, Japan and USA, and our operational costs by MSEK 40 to an
annual level of about MSEK 125. Negotiations with the Swedish Labor Unions are
expected to be finalized by mid November and the total restructuring cost is
estimated at approx. MSEK 15. The final cost will be determined and reserved
for in the Q4 accounts.
As a consequence of stopping further development of the AFS platform and due to
considerably smaller revenue than expected, we have written off capitalized
development costs related to AFS by MSEK 9 in the third quarter.
In 2007 and 2008, investments were made in a new generation of pens that has
not yet materialized in a new commercially available pen. In total, we invested
MSEK 15 in capitalized development. Since this new pen is not expected to be
commercialized in the next few years we have written down the book value of
this development.
Overall third quarter sales developed well. Both application areas increased
their sales strongly compared to the same period last year. Sales of digital
pens represent more than half of our total revenue in the last quarter as well
as in the whole of 2010 so far.
Lack of components caused C Technologies falling behind its sales plan earlier
this year. These delays are now recovered and C Technologies deliveries are in
line with our plans.
As digital pens, including C Pens, now represent considerably more than 50% of
our total net sales, the average gross margin is 62 % (71). License revenue and
royalty gross margins are still 100%.
Our cash decreased by MSEK 15 (-13) during the third quarter, and our closing
balance was MSEK 64 (95). The increased sales have tied up MSEK 12 in working
capital and capital expenditure amounts to MSEK 3.
Outlook
Through our recently announced restructuring program we are determined to make
Anoto profitable and to have a positive cash flow from 2011.
Anoto Group AB may be required to disclose the information provided herein
pursuant to the Securities Markets Act. The information was submitted for
publication at 16.00 on November 1, 2010.
For more information
Please contact:
Anders Widesjö Anoto Group AB (publ.), Corp. Id. No. 556532-3929
CFO Box 4106, SE-227 22 Lund, Sweden
+46 46 540 12 34 Phone: +46 46 540 12 00
www.anoto.com
