LEUVEN, BELGIUM--(Marketwire - Mar 7, 2013) - Option N.V. (EURONEXT Brussels: OPTI; OTC: OPNVY), a global leader in wireless connectivity, security and experience, today announced its results for the full fiscal year and second half year ended December 31, 2012. The financial information reported in this release is presented in Euros and has been prepared in accordance with the recognition and measurement criteria of IFRS as adopted by the European Union. The accounting policies and methods of computation followed in the attached financial statements are the same as those followed in the most recent annual financial statements.

Business Update

After finishing an industrial transformation, Option concentrated its efforts in the second half year of 2012 on testing, fine-tuning and go-to-market activities for its new line of products and services, including e.g. WiFi in the car with XYFI. The development of the products XYFI and VIU² have resulted in the buildup of some valuable new assets including a service management platform, a multi device user interface with streaming capabilities and routing software. These assets have allowed the Company to further improve the features of its existing products and will continue to do so for new product lines.

The most important new product-line that the Company launched in the second half of 2012 was CloudGate, a secure, reliable and affordable 3G M2M gateway that brings new levels of flexibility and ease of deployment for M2M solutions. Soon after the launch in October 2012, the Company announced partnerships with distributors, leading US System Integrators and developers, such as ILS, GetWireless, ClearConnex, Exosite, and Hilton Development Group. The fact that these and other partners signed up so quickly demonstrates the pent up demand for a configurable, reliable and affordable M2M gateway. The Company continues to work on further developing an ecosystem to secure a good market coverage and presence in the different M2M segments. The first CloudGate products were shipped in Q4, 2012 and have successfully been deployed in a number of field trials.

The Company also continues to focus on cost reductions. In line herewith, a restructuring exercise at Option Wireless Ltd. (Ireland) and Option France (France) has started. It is anticipated that these exercises will have a positive impact on the cost base in the second half of 2013. The restructuring exercise of Option Wireless Ltd. leads to a reduction of the net equity position of Option NV. As the net equity of Option NV falls below the threshold of one half of its share capital, the Company is required by law and in accordance with article 633 of the Belgian Code of Companies, to organize a Special General Meeting of Shareholders to vote on the continuity of the company.

Option confirms its intention to raise the amount of minimum 9 million EUR via the issue of a convertible bond. As announced in January the Board expects that this transaction will be concluded before the end of the first quarter of 2013. In order to bridge potential cash requirements until the completion of the transaction, the Company came to an agreement with Mondo NV, controlled by Jan Callewaert, on a mid term loan facility up to a maximum amount of 5 million EUR.

Financial Highlights of the second half year 2012

* Total revenues for the second half year of 2012 were EUR 17.6 million compared with EUR 24.1 million realized in the second half year of 2011. Product related revenues decreased from EUR 7.7 million in the second half of 2011 till EUR 6.8 million in the same period of 2012, while software and license revenues decreased from EUR 16.4 million in the second half of 2011 to EUR 10,8 million in the same period of 2012. EUR 10.6 million of that amount came out of licenses. The decrease is explained by the fact that the license agreement with Huawei has ceased in the course of Q4, 2012.

* Gross margin for the second half year 2012 was 47.3% on total revenues, compared with a gross margin of 69.1% for the comparable period in 2011. The gross margin for the second half year 2012 was negatively affected by less important license revenues and by an inventory write off of EUR 3.7 million. The Company has assessed its inventory and has revalued some of its products leading to an extraordinary write off.

* Compared to the second half year 2011, total operating expenses in the second half of 2012 decreased with EUR 8.6 million from EUR 16.8 million to EUR 8.2 million as a result of the continuing efforts of an effective cost control within the Group, but also impacted by a negative impairment on capitalized R&D for an amount of EUR 3.6 million and a positive effect by lowering the IPR accrual for an amount of EUR 6.7 million. The company has assessed its capitalized R&D expenses and has decided to concentrate them on two platforms (3G and LTE). The company took an extraordinary write off of EUR 3.6 million on other projects. The company also reassessed its outstanding payables regarding IPR obligations and, taking into account fair market conditions and external advice, the Board of Directors decided to decrease the outstanding payables with an amount of EUR 6.7 million.

* The second half year 2012 EBIT amounted to EUR 0.1 million compared with EUR -0.1 million during the corresponding period in 2011.

* Result before taxes amounted to EUR 0.02 million in the second half of 2012 compared with EUR 0.06 million during the corresponding period in 2011.

Financial Highlights of the full fiscal year result 2012

* Total revenues for the full year 2012 were EUR 40.8 million, a decrease of 18.2% compared with EUR 49.9 million revenues realized during the comparable period in 2011. Software and license revenues decreased from EUR 30.7 million in 2011 to EUR 28.2 million in 2012, explained by the fact that Huawei license revenue stopped during Q4. EUR 27.0 million of that amount came out of licenses. Product related revenues decreased from EUR 19.2 million in 2011 to EUR 12.6 million in 2012, due to the phasing out of the old products and the fact that the sales of new products did not compensate this decline.

* Gross margin for the full year was EUR 25.9 million compared with EUR 30.7 million in 2011. Gross margin year to date in 2012 was 63.4%, compared with a gross margin of 61.6% in 2011. Also in 2012 the gross margin was positively impacted by license revenues, delivering higher margins compared to revenues generated by products. During 2012 the company booked an inventory write off for an amount of EUR 4.3 million.

* Compared to the full year 2011, total operating expenses for 2012 decreased with EUR 12.0 million from EUR 34.3 million to EUR 22.3 million. The reduced expenses are the result of the downsizing of the Company, combined with lower sales related costs as well as effective cost control within the Group. As explained above in the financial highlights of the second half year the operating expenses were negatively impacted by impairment on the capitalized R&D for an amount of EUR 3.7 million and a positive impact by lowering the IPR accrual for an amount of EUR 7.4 million.

* EBIT was EUR 3.6 million or 8.8% on total revenues during the full year 2012, compared with EBIT of EUR -3.6 million or -7.2% on total revenues in 2011.

* The 2012 net result was EUR 3.6 million compared with a net result of EUR -2.9 million in 2011, or EUR 0.044 per basic share in 2012 compared with EUR -0,035 per basic share in 2011.

* The Group's balance sheet includes EUR 3.1 million in cash. The trade and other receivable position decreased from EUR 3.9 million to EUR 3.2 million and the inventory levels from EUR 6.8 million to EUR 4.0 million by the end of 2012. The intangible assets impacted by a negative impairment of EUR 3.7 million decreased from EUR 8.8 million in 2011 to EUR 4.9 million in 2012. The trade and other payable position decreased to EUR 11.9 million from EUR 18.1 million impacted by lowering our IPR accrual. The Group didn't receive any licenses from Huawei in 2012 compared to the EUR 33 million in Q1 2011 as prepaid licenses. As result, there is a decrease of deferred revenue from EUR 27.1 million to EUR 0.1 million. No deferred tax asset was recognized.

For the entire press release, including tables, click on the link below.

About Option

Option is a global leader in wireless connectivity, security and experience. Option enhances the performance, functionality and usability of wireless communications through a portfolio of 3G, 4G HSPA/LTE and WLAN connectivity solutions. The company works with mobile operators, OEMs, retailers and enterprise customers to create compelling products that enable new connected and secure services. Option is headquartered in Belgium, with further an ISO 9001 production engineering and logistics facility in Ireland. Option maintains offices in Europe, the US, Greater China, Japan and Australia. More at www.option.com.

Copyright ©2013 OPTION. All rights reserved. All product and company names herein may be (registered) trademarks or trade names.

Option reports second half year and full year 2012 results: http://hugin.info/133962/R/1683581/551038.pdf

Option rapporteert resultaten tweede halfjaar en volledig jaar 2012: http://hugin.info/133962/R/1683581/551039.pdf

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Source: Option via Thomson Reuters ONE

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