Press Release

< Back

TANDBERG Reports Fourth Quarter 2008 Results

Revenue of 225.5 MUSD and Operating Profit of 52.8 MUSD in 4Q08

OSLO and NEW YORK, February 2, 2009 – TANDBERG® (OSLO: TAA.OL), today announced unaudited financial results for the fourth quarter ended December 31, 2008.

Overview of 4Q08:
• Revenue of 225.5 MUSD with volume of 17,584 units
• Operating profit of 52.8 MUSD and pre-tax profit of 67.8 MUSD
• Cash flow from operations of 90.9 MUSD
• Delivered well against 2008 priorities

FINANCIALS
Fourth quarter revenues were 225.5 MUSD compared with 192.9 MUSD in the same quarter last year, representing 17% year-over-year growth.  Gross margin for the quarter was 66.6%, compared with 66.2% in the same quarter last year.  Selling, general & administrative (SG&A) expenses for 4Q08 totaled 85.3 MUSD, compared with 74.2 MUSD in the same quarter last year.  Operating profit was 52.8 MUSD compared with 44.9 MUSD in the same quarter last year.  Earnings per share (after tax) were 0.42 USD in 4Q08 compared with 0.30 USD in the same quarter last year. 

For the full year, revenue totaled 808.8 MUSD in 2008 compared with 630.5 MUSD in 2007, or 28% growth. Operating profit was 176.7 MUSD for 2008 and 146.1 MUSD for 2007.

The Company generated cash flow from operations of 90.9 MUSD in the quarter, which after a net cash outflow from investments of 11.9 MUSD, gave a total cash inflow of 79.0 MUSD.  As of December 31, the Company had a cash balance of 174.8 MUSD and an equity ratio of 65.2%.    

FINANCIAL TABLES
Click for financial tables.

OPERATIONS
Reviewing fourth quarter results, Fredrik Halvorsen, Chief Executive Officer, stated, "The fourth quarter was a good conclusion to a strong year for TANDBERG.

Challenging economic times require a break with past practices. Companies are being forced to reduce travel, and limit partner meetings, customer events and employee gatherings. But efficient teamwork and strengthened customer relationships are even more critical in difficult times, making communication paramount. Telepresence and video conferencing address these communication needs in an efficient manner. As such, longer term, the current economic downturn should increase video usage.

Coming out of 2008, TANDBERG is uniquely positioned in the product cycle, with the industry's broadest range of telepresence solutions for executives, traditional 1080p High Definition video conferencing for teams, and a suite of network products enabling integration with Microsoft and other Unified Communications environments.

While business leaders are evaluating the ROI of video favorably, purchasing cycles are lengthening due to capital expenditure constraints and conservative market monitoring." 

MARKETS
In 4Q 2008, TANDBERG sold 17,584 endpoint units compared with 16,787 endpoint units in the same quarter last year. Endpoint revenues increased 9%, and revenue from network products grew 51% year-on-year.  With Codian successfully integrated, the TANDBERG solution has become the de facto standard for customers in need of a scalable HD video deployment.

AMERICAS
Revenue in the Americas during 4Q08 totaled 108.9 MUSD compared with 86.7 MUSD the same quarter last year.  Federal continued its strong performance from 3Q into 4Q.  The Mid-Atlantic, Southeast and Midwest regions also performed well.  Focused end-to-end solution sales yielded robust network revenue throughout all regions.  Year-end budget spend resulted in a strong finish to the quarter.

Commercial clients are leveraging TANDBERG solutions to lower costs and improve productivity.  The TANDBERG Total Telepresence solution is drawing record levels of attention.

Going forward, the Americas theatre will focus on tight cost and margin control, and the roll-out of new products.  The team will continue selling on the productivity benefits of the technology as well as ROI.
 
EMEA
Revenue in EMEA during 4Q08 totaled 91.0 MUSD, compared with 85.5 MUSD in the same quarter last year.  Central Europe, Nordics and Italy held up well, while performance in Iberia and Russia was weaker.

Network products continued to be a strong point of differentiation for larger deployments and advanced customers.  The Total Telepresence portfolio, which includes the T3, T1 and the Telepresence Server, got strong reception from customers.  In particular, the integration of TANDBERG telepresence with Microsoft desktop video generated excitement.

The EMEA theatre will focus on tight cost and margin control and partner training on the new product portfolio. 

ASIA PACIFIC
Revenue in APAC during 4Q08 totaled 25.6 MUSD, compared with 20.7 MUSD in the same quarter last year.  Anticipated large deals closed in the quarter. However, the economic downturn is becoming a factor in parts of APAC, with several government contracts on hold.

The North Asia team had good execution on several large projects, and received awards for the telepresence engine C90 at ITPRO Japan.  Continued investment in channels and organization remains a priority.

In South Asia, Singapore and Hong Kong are holding up well.  Australia continued to perform well in a difficult environment.

2008 HIGHLIGHTS
In the first quarter of 2008 the Company outlined three priorities for the year: 1) Capture market expansion, 2) Deepen strategic relationships, and 3) Enable true unified communications.

Capture market expansion.  TANDBERG expanded the market both at the high end and through mass adoption. At the high end, the TANDBERG Total Telepresence solution for executives included 1080p High Definition immersive telepresence systems, managed services and a telepresence server that bridges telepresence and video conferencing.  The Company also introduced the E20 video IP phone, a personal video system priced for enterprise-wide adoption. 

TANDBERG has recently followed up with its next generation Profile series, providing telepresence-quality 1080p High Definition video conferencing for teams throughout the organization. With these introductions, TANDBERG offers the highest performing portfolio of High Definition products in the industry.

Deepen strategic relationships.  In one of the most significant alliance announcements made this year, TANDBERG and HP introduced a global managed service offering.  Developed by HP, the HP Halo Video Collaboration Service is available for the full range of TANDBERG conferencing systems, including TANDBERG Total Telepresence offerings. HP and TANDBERG also expanded their reseller agreement, giving customers additional flexibility and choice in purchasing collaboration products and services. 

Enable true unified communications.  With the Codian team fully integrated, network product development has surpassed expectations.  A powerful example is the Telepresence Server, a telepresence-grade network component which has enabled multiple site calling with exceptional high quality and ease of use for telepresence participants. The telepresence server has broken the barriers between telepresence and video conferencing.

TANDBERG also announced that users of Microsoft Office Communicator 2007 can seamlessly connect face-to-face with other team members that use TANDBERG room-based video and telepresence systems.  This interoperability with a Microsoft-based Unified Communications platform now enables Microsoft Office Communicator 2007 video users to join a TANDBERG telepresence meeting.

OSLO and NEW YORK, February 2, 2009
The Board of Directors of TANDBERG asa

Jan Chr. Opsahl (sign.)      
Chairman     

Fredrik Halvorsen (sign.)  
Chief Executive Officer  

WEBCAST/CONFERENCE CALL DETAILS

Today at 5:45 pm Central European Time and 11:45 am Eastern Time, Fredrik Halvorsen, Chief Executive Officer, will host a live webcast/conference call from Oslo, Norway.  Additionally, a PowerPoint presentation will accompany the webcast /conference call.  To access the webcast, please visit:   https://tandbergevents.webex.com

For those who prefer to dial-in, the conference call can be accessed at +1.617.614.4913 (international), +1.800.591.6949 (U.S. callers) and 0808.234.7616 (U.K. callers). The audience passcode for the call is TANDBERG. 

Audited 2008 financials will be available February 18, 2009.  First quarter results will be presented on April 23 2009 at 5:45 pm CET / 11:45 am ET.   For further information please contact Geir Olsen, ph. +44 7766254782.

FINANCIAL TABLES
Click for full press release plus financial tables.

FINANCIAL STATEMENTS - BASIS FOR PREPARATION
The enclosed consolidated condensed financial statements have been prepared in accordance with IAS 34, “Interim Financial Reporting”.

SIGNIFICANT ACCOUNTING POLICIES
The accounting policies and methods of computation used in the preparation of the financial statements are consistent with the policies used in the annual financial statements for the year ended December 31, 2007. The enclosed consolidated condensed financial statements should be read in conjunction with the 2007 annual financial statements, which include a full description of the Group’s accounting policies.

ABOUT TANDBERG
TANDBERG is the leading provider of telepresence, high-definition videoconferencing and mobile video products and services.  The Company has dual headquarters in New York and Oslo.  TANDBERG designs, develops and markets systems and software for video, voice and data communication.  The Company provides sales, support and value-added services in more than 90 countries worldwide.  TANDBERG is publicly traded on the Oslo Stock Exchange under the ticker TAA.OL.  Please visit www.tandberg.com for more information.

TANDBERG is a registered trademark or trademark in the U.S. and certain other countries. All other trademarks are property of their respective owners.