Aastra Reports Second Quarter Financial Results

TORONTO, ONTARIO, Jul 17 (MARKET WIRE) --
Aastra Technologies Limited - (TSX:AAH) today reported its unaudited
financial results for the second quarter ended June 30, 2012.

Revenue for the three months ended June 30, 2012 was $147.1 million
compared to $174.1 million for the same quarter in 2011, a decrease of
approximately 15.5%. Excluding the impact of foreign exchange, revenue
dropped approximately 10.9% from the same period last year. Revenue
decreases were experienced across most geographical markets including
Western Europe where the majority of the Company's revenue is generated.
Revenue for the six months ended June 30, 2012 was $294.3 million
compared to $336.8 million in the same period last year, a decrease of
12.6%. Again, excluding foreign exchange, revenue decreased by 9.6% over
the same period last year. The impact of the economic weakness in Europe
has clearly had a significant negative impact on our revenue in the first
half of 2012.

Gross margin increased to 44.2% of revenue in the second quarter of 2012
compared to 41.6% of revenue in the same period in 2011 partly due to
reduced price discounting. In addition, the Company continues to
experience an increase in revenue from software applications and service
as a percentage of total revenue and this had a positive impact on gross
margins realized during the second quarter of 2012.

Research and development expenses in the second quarter of 2012 were
$15.0 million or 10.2% of revenue, compared to $15.8 million or 9.1% of
revenue in the same quarter of 2011. Selling, general and administrative
("SG&A") expenses were $44.4 million or 30.2% of revenue in the second
quarter of 2012 compared to $45.9 million or 26.4% of revenue in the
second quarter of 2011. Operating expenses decreased slightly compared to
last year as a result of the impact in foreign exchange rates on our
European expenditures. This decrease was partially offset by an increase
in bad debt expense and higher restructuring costs incurred in the second
quarter this year.

Foreign exchange losses of $0.7 million were recognized in the second
quarter of 2012, mainly as a result of a continued weakness in the Euro,
compared to a foreign exchange gain of $0.3 million in the same period
last year. Amortization expense recorded in operating expenses decreased
to $3.6 million in the second quarter of 2012 compared to $5.0 million in
the second quarter of 2011 as certain intangible assets acquired in
previous years have become fully amortized.

The Company recorded net finance income of $1.0 million in the second
quarter of 2012 compared to $1.1 million in the same period in 2011.
Income tax expense was $0.4 million or 16.8% of pre-tax profit compared
to $1.1 million or 15.0% of pre-tax profit in the second quarter last
year.

As a result of the above, profit decreased in the second quarter this
year to $1.9 million or $0.15 diluted earnings per share compared to $6.1
million or $0.43 diluted earnings per share in the same period in 2011.
Profit for the six months ended June 30, 2012 was $3.9 million or $0.29
diluted earnings per share compared to $6.3 million or $0.44 diluted
earnings per share in the first half of 2011. Despite a challenging
climate in our largest geographic segment, this represents the Company's
57th consecutive quarter of profitability.

Cash and short-term investments totaled $95.5 million at the end of June
2012 compared to $134.1 million at December 31, 2011 and $158.2 million
at the end of March 2012. During the second quarter, the Company used
$7.3 million of cash flow in operations. Accounts payable decreased by
$10.1 million as a result of lower labour liabilities and supplier
payables; while partially offsetting this accounts receivable decreased
by $2.6 million. Both balances were also impacted by lower exchange rates
on Euro denominated receivables and payables at the end of the second
quarter. In addition, inventory increased by an additional $4.3 million
while finance lease receivables decreased by $4.6 million.

During the second quarter, the Company used $51.4 million to repurchase
approximately 2.2 million of its common shares through its substantial
issuer bid and Normal Course Issuer Bid while also paying $2.4 million in
dividends to shareholders.

Finally, the Company is also pleased to announce that it will pay a
dividend to its shareholders of $0.20 per share for this quarter, payable
on August 22, 2012 to all shareholders of record on August 1, 2012. The
dividend declared today has been designated as an "eligible" dividend for
the purposes of the Income Tax Act (Canada) and similar provincial
legislation. Shareholders of Aastra are entitled to receive dividends
only if and when such dividends have been declared and there is no
entitlement to any dividends prior to any declaration thereof by Aastra's
Board of Directors.

About Aastra Technologies Limited

Aastra Technologies Limited (TSX:AAH) is a global company at the
forefront of the Enterprise Communication market. Headquartered in
Concord, Ontario, Canada, Aastra develops and delivers innovative and
integrated solutions that address the communication needs of businesses
small and large around the world. Aastra enables Enterprises to
communicate and collaborate more efficiently and effectively by offering
customers a full range of open standard IP-based and traditional
communications solutions, including terminals, systems, and applications.
For additional information on Aastra, visit our website at
http://www.aastra.com.

Certain statements made herein may be forward-looking statements within
the meaning of applicable Canadian securities legislation. These
forward-looking statements include, among others, statements with respect
to our Board of Directors declaring any future quarterly dividends and,
if so declared, the amount of such dividends. By their very nature,
forward-looking statements involve numerous factors and assumptions, and
are subject to inherent risks and uncertainties, both general and
specific, which give rise to the possibility that such forward-looking
statements will not be achieved.

Shareholders are entitled to receive dividends only if and when such
dividends have been declared and there is no entitlement to any dividends
prior to any declaration thereof by our Board of Directors. The material
factors that will be considered by our Board of Directors in determining
whether it is appropriate to declare any future dividends, and the amount
of any such dividends, include: our earnings, cash flow, quarterly
fluctuations in financial results and financing requirements to fund
acquisitions or other business opportunities. Please refer to our filings
on the website maintained by the Canadian Securities Administrators at
www.sedar.com, including our Annual Information Form and our annual and
quarterly Management Discussion and Analyses for other material factors
that may be considered by our Board of Directors in determining whether
to declare any future dividends and the amount of any such dividends.

We caution readers not to place undue reliance on these forward-looking
statements as our actual results may differ materially from our
expectations if known and unknown risks or uncertainties affect our
business, or if our estimates or assumptions prove inaccurate. Therefore,
we cannot provide any assurance that forward-looking statements will
materialize. Unless otherwise required pursuant to applicable Canadian
securities legislation, we assume no obligation to update or revise any
forward-looking statement, whether as a result of new information, future
events or any other reason.

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AASTRA TECHNOLOGIES LIMITED
CONSOLIDATED STATEMENTS OF PROFIT (UNAUDITED)
Stated in thousands of Canadian dollars, except per share amounts

YEAR-TO-DATE 2nd QUARTER
Six months Three months
ended June 30th ended June 30th

2012 2011 2012 2011
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Revenue $ 294,341 $ 336,756 $ 147,071 $ 174,050
Cost of sales 165,412 195,224 82,083 101,618
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128,929 141,532 64,988 72,432
Expenses:
Selling, general and
administrative 87,330 90,670 44,402 45,942
Research and development 29,879 33,169 14,995 15,770
Depreciation and
amortization 7,925 10,477 3,642 4,969
Foreign exchange loss
(gain) 1,412 1,623 680 (259)
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Results from operating
activities 2,383 5,593 1,269 6,010
Finance income (2,394) (2,041) (1,101) (1,223)
Finance expense 104 247 58 75
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Profit before income taxes 4,673 7,387 2,312 7,158
Income taxes 786 1,116 388 1,071
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Profit for the period $ 3,887 $ 6,271 $ 1,924 $ 6,087
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Earnings per share:
Basic $ 0.29 $ 0.45 $ 0.15 $ 0.43
Diluted $ 0.29 $ 0.44 $ 0.15 $ 0.43
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(i) Actual common shares outstanding as at June 30, 2012 - 11,816,572 (2011
- 14,074,385)

(ii) Weighted average common shares outstanding for the six months and three
months ended June 30, 2012 - 13,475,947 and 12,925,278 (2011 - 14,069,413
and 14,074,385)

(iii) Weighted average fully diluted common shares outstanding for the six
months and three months ended June 30, 2012 - 13,571,836 and 13,019,945
(2011 - 14,164,189 and 14,188,694)

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The interim consolidated financial statements for the six months and
three months ended June 30, 2012 and 2011 have not been reviewed by an
auditor.

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AASTRA TECHNOLOGIES LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Stated in thousands of Canadian dollars

YEAR-TO-DATE 2nd QUARTER
Six months Three months
ended June 30th ended June 30th

2012 2011 2012 2011
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Cash and cash equivalents
provided by (used in):
Operating activities:
Profit for the period $ 3,887 $ 6,271 $ 1,924 $ 6,087
Depreciation of property,
plant and equipment 4,932 5,713 2,455 2,840
Amortization of intangible
assets 4,727 7,057 2,034 3,418
Share-based compensation
expense 627 823 289 366
Loss on sale of property,
plant and equipment 450 433 185 433
Finance income (2,394) (2,041) (1,101) (1,223)
Finance expense 104 247 58 75
Income tax expense 786 1,116 388 1,071
Change in non-cash pension
liabilities (122) 422 (92) (207)
Change in non-cash
operating working capital 9,010 (11,620) (13,079) 759
Income taxes paid (625) (5,826) (388) (1,535)
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21,382 2,595 (7,327) 12,084
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Investing activities:
Maturity of short-term
investments 4,201 - 4,201 -
Purchase of short-term
investments (8,913) - (8,913) -
Interest received 1,728 1,589 872 871
Proceeds from disposal of
property, plant and
equipment 58 8 51 8
Purchase of property, plant
and equipment (1,660) (2,472) (835) (1,889)
Purchase of intangible
assets (407) (321) (268) (301)
Business acquisition, net
of cash acquired (2,675) - - -
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(7,668) (1,196) (4,892) (1,311)
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Financing activities:
Dividends paid to
shareholders (5,180) (5,629) (2,374) (2,815)
Proceeds from exercise of
share options 215 251 177 -
Repurchase of shares,
including transaction
costs (51,432) - (51,432) -
Receipt of acquired lease
receivables 241 400 121 213
Payment of acquired loan
payable (241) (400) (121) (213)
Increase in loans payable - 300 - 300
Repayment of loans payable (49) (15,491) (12) (15,417)
Finance costs paid (78) (233) (44) (71)
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(56,524) (20,802) (53,685) (18,003)
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Foreign exchange on cash
held in foreign currency (577) 2,029 (1,651) 1,462
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Increase (decrease) in cash
and cash equivalents (43,387) (17,374) (67,555) (5,768)
Cash and cash equivalents,
beginning of period 129,933 90,704 154,101 79,098
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Cash and cash equivalents,
end of period $ 86,546 $ 73,330 $ 86,546 $ 73,330
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The interim consolidated financial statements for the six months and
three months ended June 30, 2012 and 2011 have not been reviewed by an
auditor.

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AASTRA TECHNOLOGIES LIMITED
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
Stated in thousands of Canadian dollars

JUNE 30th DECEMBER 31st JUNE 30th
2012 2011 2011
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ASSETS
Current assets:
Cash and cash equivalents $ 86,546 $ 129,933 $ 73,330
Short-term investments 8,913 4,202 4,175
Trade and other receivables 146,507 167,142 163,769
Current tax assets 7,323 7,348 5,062
Inventories 81,749 80,963 114,938
Finance lease receivables 18,892 21,336 21,073
Acquired lease receivables 261 462 548
Prepaid expenses and other
assets 8,107 7,234 9,227
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358,298 418,620 392,122

Long-term investment 6,166 5,406 5,641
Deferred tax assets 15,717 15,810 14,662
Finance lease receivables 18,659 23,469 27,357
Acquired lease receivables 87 138 433
Property, plant and equipment 26,941 30,953 35,477
Goodwill 46,114 46,323 47,999
Intangible assets 24,101 26,290 33,161
Other assets 481 516 622
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$ 496,564 $ 567,525 $ 557,474
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LIABILITIES AND EQUITY
Current liabilities:
Trade and other payables $ 103,512 $ 116,165 $ 112,106
Current tax liabilities 30,442 30,394 24,735
Deferred income 34,176 36,222 34,662
Current portion of loans
payable 261 512 841
Current portion of
provisions 13,304 12,494 14,800
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181,695 195,787 187,144

Pensions 36,844 37,566 26,062
Loans payable 87 138 607
Provisions 2,828 2,965 3,207
Deferred tax liabilities 6,762 7,851 9,773
Other liabilities 741 995 1,129
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228,957 245,302 227,922
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Equity:
Share capital 79,738 94,917 94,904
Contributed surplus 10,874 10,247 9,715
Translation reserves (8,892) (6,159) 2,750
Retained earnings 185,887 223,218 222,183
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267,607 322,223 329,552
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$ 496,564 $ 567,525 $ 557,474
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The interim consolidated financial statements for the six months and
three months ended June 30, 2012 and 2011 have not been reviewed by an
auditor.

Contacts:
Aastra Technologies Limited
Investor Relations
(905) 760-4200
investors@aastra.com

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