Option reports second half year and full year 2011 results

"Mobile broadband is increasingly seen as a utility," said JanCallewaert, CEOat Option. "The market has moved to a point where today it is notenough tosimply enable broadband connectivity, it has to be connectivity with apurpose.Option is at the forefront of combining excellent connectivity with world-classsecurity and great user experience."

The industrial transformation

The industrial transformation, the Company embarked on in 2011, isbeingcompleted. The Company rebuilt its business by creating innovativeandcompelling products that enable new connected and secure services.

* The launch of the VIU², an elegant mobile 3G camera that enablesanyone to easily set up and manage the remote monitoring of homes, warehouses, vacation homes, construction sites, offices and much more. Since itslaunch VIU² has been upgraded to a Plug 'n Play 3G camera, streaminganywhere anytime to any iOS or Android device.

* Option successfully completed the data interoperability testingof its GTM 601W wireless module on the mobile broadband network of NTT DOCOMO,INC.

* AT&T introduced the GTM601 LGA module in its Mobile BroadbandAccelerator Program. This extended program includes faster network innovation, additional form factors and equipment providers, offering nextgeneration consumer electronics, embedded computing and machine-to-machine device makers access to a more efficient path to production.

The Group announced its investment of $1

* The Group announced its investment of $1.5 million and partnership withSan Francisco, US-based Autonet Mobile, Inc; a leading provider of in-car connectivity. The partnership will use Option's wireless modules and software to deliver the first mobile IP-based Telematics Control unit(TCU) for cars. Option's wireless modules combined with Autonet TCU andmanaged network, make this the first intelligent communication and controldevice designed to create a new and verticalized mobile automotive ecosystem.The first car model with the TCU will be available later on this year.

* Total earnings for the second half year of 2011 were EUR 24.1 million compared with EUR 26.9 million realized in the second half year of2010. Product related earnings decreased from EUR 20.4 million in the secondhalf of 2010 till EUR 7.7 million in the same period of 2011, during softwareand license earnings increased from EUR 6.7 million in the first half of2010 to EUR 16.4 million in the same period of 2011. EUR 14.6 million of thatamount came out of licenses.

The second half year 2011

* Gross margin for the second half year 2011 was 69.1% on total earnings, compared with a gross margin of 34.8% for the comparable period in2010. The gross margin for the second half year 2011 was positively influenced bymore important license earnings.

* Total earnings for the full year 2011 were EUR 49.9 million, a decreaseof 13.5% compared with EUR 57.7 million earnings realized while thecomparable period in 2010. Software and license earnings increased from EUR 6.7million in 2010 to EUR 30.7 million in 2011. EUR 28.0 million of that amountcame out of licenses. Product related revenues decreased from EUR 51.0million in 2010 to EUR 19.3 million in 2011, due to the phasing out of the oldproducts and the fact that the new products are only just entering the market.

The full year

* Gross margin for the full year was EUR 30.7 million compared with EUR15 million in 2010. Gross margin year to date in 2011 was 61.6%, comparedwith a gross margin of 26.1% in 2010. The 2011 gross margin was positively impacted by increased license earnings, delivering higher marginscompared to earnings generated by products.

* EBIT was EUR -3.6 million or -7.2% on total revenues while the fullyear 2011, compared with and EBIT of EUR -31.9 million or -55.2% on total earnings in 2010.

The Group's balance sheet includes EUR 25

* The Group's balance sheet includes EUR 25.2 million in cash. The tradeand other receivable position decreased from EUR 7.3 million to EUR 3.9million and the inventory levels from EUR 12.4 million to EUR 6.8 million bythe end of 2011. The intangible assets remained at the same level of EUR 8.8 million. The trade and other payable position decreased to EUR 18.1million from EUR 30.1 million. The Group received EUR 33 million in Q1 2011 as prepaid licenses from Huawei. As result, there is an increase ofdeferred revenue from EUR + 4.4 million. No deferred tax asset was recognized.