INTERIM REPORT JANUARY - MARCH 2008
Net Insight AB (publ), Corporate Reg. No. 556533-4397
January - March 2008
• Net sales increased by 21% to SEK 64.7 million (53.4).
• Operating earnings improved to SEK 5.5 million (4.8)
• Net income improved to SEK 6.2 million (5.1).
• Net margin was 9.5% (9.6)
• Gross margin at 69.0% is affected by reclassification of support and training
expenses to direct costs. Adjusted for this item gross margin was 70.8% (70.5).
• Software and support revenue increased to SEK 14.7 million (12.4).
• Total cash flow of SEK –22.4 million (8.3) was mainly driven by a temporary
increase in trade receivables.
• Earnings per share amounted to SEK 0.02 (0.01).
CEO comments
In the first quarter 2008, Net Insight continued the growth trend from last year and we reached our highest quarterly revenue so far. Our established customer base generates healthy business at the same time as the company adds on new customers in all main regions, Europe, US and Asia.
The high activity level in Asia has generated a significant increase in our business with new customer wins and continued deliveries to important projects in the region. Also in Asia, Net Insight once again was selected for a national DTT network, which further proves the Nimbra platform’s capabilities for digital terrestrial TV, and mobile TV networks. The importance of a strong partner network was also proven when a large telecom operator in Japan selected Net Insight for a contribution network.
In the US market the good momentum accelerated when MediaXstream selected Net Insight for the first phase of a large multiservice transport network. Our US customers also continue to expand their existing Nimbra-based networks, which further strengthens our position for demanding broadcast, and media transport solutions in the region.
In Europe our customers continue to expand and upgrade their networks. Most of the large original contract for the Norwegian DTT network has been successfully installed and with these deliveries coming to an end, revenues in Europe have declined during the quarter. However, new projects in Asia and the US have continued to grow the overall revenues for the company and we expect that Europe
will be strong going forward.
The transition to Digital Terrestrial TV continues throughout the world and is a fundamental market driver for Net Insights business with numerous business opportunities and customer wins. With exception of the Norwegian order, the size of initial individual DTT contracts have so far been smaller than we first anticipated. In the Broadcast & Media transport market we further strengthened our position in the quarter and we added another major telecom operator as our customer, which create a platform for new IPTV/CATV business opportunities. We now have a stable basis for future business with a strong customer base, market development and demand for our media centric transport solutions.