TANDBERG Television delivered revenues of MUSD 84.2 in 1Q06, up 24% compared to MUSD 67.8 in 1Q05. The gross margin was 57.4%, up from 56.3% in the same quarter in 2005. Operating profit was MUSD 16.7 compared to MUSD 10.3 in the same quarter last year. Pre-tax profit was MUSD 16.7, up from MUSD 12.9 in the same period in the previous year.
The cash balance at the end of the quarter was MUSD 89.4 and included net cash income from operations of MUSD 7.1 up from MUSD 5.6 in the same period in 2005. Net cash inflow in the quarter was MUSD 13.5 after a share issue that raised MUSD 90 net of expenses and the acquisition of SkyStream Inc., which utilised MUSD 76.6 net of cash received. Total assets for the group were MUSD 513.4, with an equity ratio of 85% at 31 March 2006. Total shares outstanding at the end of the quarter were 80,529,876.
Market & Products
1Q06 saw the completion of the purchase of SkyStream Networks, a strategic move designed to create a clear global leader in the rapidly expanding IPTV market. The purchase brings together two highly complementary, best-in-class product offerings to further strengthen TANDBERG Television's unique offering of integrated compression, interactive and on-demand content solutions. Following the closing of the SkyStream purchase, TANDBERG Television announced that its CEO and President, Eric Cooney, would lead the Americas organization through the integration process for the recent acquisitions. The move is designed to benefit a smooth and efficient integration process while continuing to grow the company's market presence in the region. 1Q06 was a milestone quarter for the Americas organization with record revenue performance and the announcement of several strategic customer wins in the North American cable, IPTV and HDTV sectors.
During the quarter TANDBERG Television announced new product innovations, exhibiting and presenting papers at over 20 industry events around the world. The National Cable Show (NCTA) in Atlanta, the US cable industry's premier annual event, saw increased interest in TANDBERG Television's offering as the company demonstrated a number of new solutions including an interactive advertising platform, an MPEG-4 AVC cable head-end and the latest version of its Adpoint on-demand ad insertion software, a critical tool in the cable operators' development of an advertising revenue-supported VOD model.
TANDBERG Television also announced global deployments of its digital media infrastructure solutions and continued to benefit from strong market demand for its unique suite of products. In the compression space, a number of contracts and deployments were revealed including a MUSD 3.7 Asian DTH satellite deal, an MPEG-4 AVC SD roll-out of IPTV by GlobeCast for France Telecom's MaLigneTV, the use of TANDBERG solutions by NBC for the HD broadcast of the Winter Olympics and several new contracts in China including an IPTV system for Shanghai Telecom and the HDTV roll-out for the national broadcaster CCTV. Asia also saw the first deployment of the TANDBERG OpenStream® digital services platform for a video-on-demand roll-out by Shanghai Oriental Cable network. Also in the on-demand space, Comcast Spotlight confirmed that it is using TANDBERG Adpoint® to manage and automatically place ads in on-demand content delivered to all Comcast Digital Cable VOD customers, a move set to enable cutting-edge new forms of advertising. For NBC's telecast of the 63rd Annual Golden Globe Awards, TANDBERG Television created a unique interactive experience to allow viewers to test their knowledge of film and television and cast their votes in a variety of film and television trivia polls.
The Board continues to be pleased with the company's successful execution of its strategic plan. The Board remains encouraged by a further quarter of top-line growth, solid gross margins and profitability. With a strong technology portfolio and successful operational execution the Board believes the company is well placed to benefit from continued market expansion.
Basis of Preparation
The interim consolidated, financial statements have been prepared in accordance International Financial Reporting Standards (IFRS) and IFRIC interpretations issued and effective at the time of preparing these statements.
Oslo, Norway 18th April 2006
The Board of Directors of TANDBERG Television ASA
Jan Chr. Opsahl, Chairman
Eric Cooney, CEO
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