<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 6-K
REPORT OF FOREIGN ISSUER
Rursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For 2Q-2000 results
NERA ASA
Kokstadveien 23, P.O. Box 7090
N-5020 BERGEN
Norway
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F X Form 40-F
----- -----
Indicate by ckeck mark whether the registrant by furnishing the
information continued in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes No X
----- ------
If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b):
<PAGE> 2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorised.
NERA ASA
By: Bjorn Ove Skjeie (sign.)
Name: Bjorn Ove Skjeie
Title: President and
Chief Operating Officer
Dated: August 10, 2000
<PAGE> 3
NERA ASA
PRESS RELEASE, August 10, 2000
Postal Address
P.O. Box 7090, N-5020 BERGEN, Norway,
Office Address
Kokstadveien 23, BERGEN, Norway,
Tel No: +47 55 22 51 00
Fax No: +47 55 22 52 99
Head Office
Nera ASA, 5020 BERGEN
Register of Business Enterprises
NO 944 536 949 MVA
NERA AT HALF YEAR: SPEED UP IN WIRELESS BROADBAND ACCESS
SOLID ORDER INTAKE SECURES OPERATIONS
A STRONG AND INCREASING MOMENTUM IN THE NEW BUSINESS AREA WIRELESS BROADBAND
ACCESS WITH SIGNING OF THE FIRST CONTRACTS, A SOLID ORDER INTAKE AND
SATISFACTORY OPERATIONS ARE THE MAIN FEATURES OF THE NERA GROUPS HALF-YEAR
RESULTS. THE INCREASE IN BOTH ORDER INTAKE AND SALES ARE ABOUT 17 PERCENT WHEN
COMPARED TO SAME PERIOD IN 1999 RESTATED FOR DISCONTINUED OPERATIONS. A
CONTINUED HEALTHY DEVELOPMENT OF THE GROUP'S OPERATIONS, WITH ABOUT 20 PERCENT
GROWTH IN THE TRANSMISSION NETWORKS AREA FOR THE YEAR IS EXPECTED. THE
EXPECTATIONS OF A STRONG MARKET IN WIRELESS BROADBAND ACCESS HAVE BEEN
CONFIRMED, AND DEVELOPMENT OF THIS AREA WILL INTENSIFY.
KEY FIGURES 1ST HALF 2000*
<TABLE>
<CAPTION>
AMOUNTS IN 1ST HALF 2000 1ST HALF 1999 CHANGE IN % OVER 1ST HALF
MILLION NOK RESTATED 1999 RESTATED 1999
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<S> <C> <C> <C> <C>
Revenues 1163.0 988 +17 % 1393
----------------------------------------------------------------------------------
OPERATING INCOME 100.8 41.3 +144 % 64.4
BEFORE WIRELESS
BROADBAND ACCESS
----------------------------------------------------------------------------------
OPERATING INCOME 80.0 41.3 +94 % 64.4
BEFORE
RESTRUCTURING
----------------------------------------------------------------------------------
Income before tax 103.2 33.7 +206 % 56.8
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ORDER INTAKE 1442 1231 +17 % 1634
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</TABLE>
* Column 4 shows actual 1999 figures as reported in the accounts, column 2 shows
the 1999 figures after adjusting for discontinued operations.
OPERATIONS IN THE FIRST HALF OF 2000
"A positive market, speedy development of our broadband venture and satisfactory
operations makes us pleased with the way this year is progressing," says BJORN
OVE SKJEIE, CEO OF NERA ASA, commenting the mid-year results. "A margin before
R&D of 17.2 percent is evidence of healthy operation, at the same time R&D
expenditure at more than 10 percent of revenues in the first half of 2000 is
significantly higher than previous periods."
1 (3)
<PAGE> 4
The order intake in the Transmission Networks area increased by 29 percent in
the first half. Strong demand for Nera products in most markets, such as England
and Mexico, created record high new order levels. The operating margin was
negatively affected in the second quarter by a strike and a large number of
public holidays, resulting in lower efficiency in the production and lower
volumes delivered. The strike reduced income by NOK 10 million. The SDH-link
NL290 is still the dominant product family, but CityLink shows steady growth in
volume.
"Inmarsat has been able to deliver where other satellite systems only have been
creating expectations. This has given momentum to the sales of established
Inmarsat products such as Nera World Phone and "B"-terminal, while the sales of
Nera WorldCommunicator has yet to take off", says the CEO. He emphasizes the
fact that the Satellite Communications area sees a number of opportunities
resulting from a contract with ACeS. Even though the ICO-contract now has been
terminated, it has given Nera valued know-how in fields like miniaturization
techniques, which is important in other projects. The termination of the
ICO-contract resulted in a gain of NOK 7.5 million.
HIGH LEVEL OF ACTIVITY WITHIN WIRELESS BROADBAND ACCESS
" It is gratifying to book the first orders already in the second quarter,"
comments Skjeie. A number of important contracts have been signed, including
Shin Sat, Modalen and Eutelsat, and a Velocity testsystem has been delivered to
the CLEC-market in the U.S. An organisation of 70 people has been established,
and important co-operation agreements have been made with a number of parties.
The contract with Modalen municipality is giving Nera a unique experience in
building a wireless broadband access network in a small community.
Eutelsat and Nera have signed a contract regarding a project to build a pilot
satellite network based on the new DVB Return Channel via Satellite (DVB-RCS)
standard. The DVB-RCS terminals will be powerful tools for the corporate,
institutional and home-office users. They will become an attractive platform for
the delivery of broadband access and multimedia services to the residential
market - in competition with and complementary to DSL telephone and cable-TV
network solutions.
In a strategic co-operation Nera and ST Microelectronics, one of the worlds
leading developer and manufacturer of ASIC-solutions, will develop technology
and software for turnkey interactive broadband solutions for digital set top
boxes.
The details in the contracts with Eutelsat and ST Microelectronics will be
released at the International Broadcasting Conference (IBC) in Amsterdam at
September 9.
Nera will achieve time-to-market leadership through an OEM-agreement with
BreezeCOM by selling Nera labelled BreezeCOM broadband access products.
OUTLOOK FOR THE YEAR: TRANSMISSION NETWORKS UP 20 PERCENT
- SATELLITE COMMUNICATIONS A PROFITABLE BUSINESS
The Transmission Networks business area is expected to have a 20 percent growth
in both revenues and income compared to 1999. The third quarter will see start
up of production in Brazil, and it is expected that customers who currently are
operating CityLink evaluation systems will order networks in the second half of
this year.
2(3)
<PAGE> 5
Satellite Communications is expected to achieve an operating margin of more than
10 percent on slightly lower revenues than the previous year. Nera World
Communicator is receiving increasing attention, and the effort to create a
breakthrough in the market continues. In the second half we also expect a
clarification of whether the regional systems will represent new business
opportunities.
"Our expectations of a strong market in broadband access have been confirmed and
we will put a lot of effort into getting a leading position in the market. The
Scandinavian market is an early starter, and we will concentrate our marketing
effort in the U.S. and in Europe. We will increase the effort in the Wireless
Broadband Access area, expecting to spend NOK 100 million in the second half,"
ends CEO Bjorn Ove Skjeie.
Nera is a Norwegian company specializing in the design, development,
manufacturing, and marketing of wireless telecommunications equipment and
systems and the provision of related services. Nera supplies mobile satellite
terminals, land earth stations and airtime billing services, principally for the
Inmarsat global satellite communications network, and microwave radio relay
systems and telecommunications management networks. Nera is listed on NASDAQ in
New York (ticker: NERAY) and on the Oslo Stock Exchange. Nera ASA has an
associated company, Nera Telecommunications Ltd., listed in the Singapore
Exchange Ltd. (ticker: Nera Tel). For further information, visit
http://www.nera.no/
Half-year statement and report are available on Nera's homepage at www.nera.no
Enclosures: Income statement, balance sheet, statement of cash flows
and quarterly results.
Contact: Mr. Helge Skaar, Manager Corporate Communications, Nera ASA
Phone: +47 55 22 58 20, e-mail: [email protected]
3(3)
<PAGE> 6
Quarterly Results
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
2ND Q. 1ST Q. 4TH Q. 3RD Q. 2ND Q. 1ST Q.
(Amounts in NOK 1000) 2000 2000 1999 1999 1999 1999
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ORDERS RECEIVED 853,149 589,244 657,363 596,257 825,690 808,659
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SALES 548,476 614,564 736,891 635,820 679,599 713,467
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OPERATING INCOME
BEFORE RESTRUCTURING 29,901 50,079 66,229 45,786 31,696 32,737
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INCOME BEFORE TAXES 40,488 62,670 86,914 153,060 29,775 27,052
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</TABLE>
Statements of Cash Flows
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
(Amount in NOK 1000) 1ST HALFYEAR 1ST HALFYEAR YEAR
2000 1999 1999
-------------------------------------------------------------------------------------------------------------------------------
Net income 71,852 40,951 207,578
Depreciation 24,870 30,195 58,667
Writedowns goodwill and financial non-current assets 1,700
Change in inventories, accounts receivables/payable and
other working capital items -129,369 77,053 332,603
Other adjustments to operating activities 101,509 19,286 -206,051
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NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES 68,862 167,485 394,497
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Capital expenditures -40,821 -33,143 -60,151
Proceeds from sales of property, plant and equipment 827 4,577 5,013
Other investments and sales -14,788 29,324 173,411
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NET CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES -54,782 758 118,273
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Net change in debt 8,080 -23,702 -257,273
Dividends paid -19,562
Net change in own shares -10,930
Proceeds from issuance of shares 882,174
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NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES 859,762 -23,702 -257,273
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TRANSLATION DIFFERENCES 538 3,491 -6,640
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NET CHANGE IN CASH AND CASH EQUIVALENTS 874,380 148,032 248,857
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 481,534 232,677 232,677
CASH AND CASH EQUIVALENTS AT END OF PERIOD 1,355,914 380,709 481,534
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 7
Income Statments
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
(Amounts in NOK 1000) 1ST HALFYEAR 1ST HALFYEAR YEAR 2ND QUARTER 2ND QUARTER
2000 1999 1999 2000 1999
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ORDERS RECEIVED 1,442,393 1,634,349 2,887,967 853,149 825,690
SALES 1,163,040 1,393,066 2,765,777 548,476 679,599
Operating costs -938,625 -1,187,564 -2,314,276 -444,770 -573,775
Depreciation -24,870 -30,195 -58,667 -12,097 -15,731
----------------------------------------------------------------------------------------------------------------------------------
OPERATING INCOME BEFORE R&D 199,545 175,307 392,834 91,609 90,093
----------------------------------------------------------------------------------------------------------------------------------
Research and Development -119,565 -110,874 -216,386 -61,708 -58,397
----------------------------------------------------------------------------------------------------------------------------------
OPERATING INCOME BEFORE RESTRUCTURING
GAIN AND LOSS 79,980 64,433 176,448 29,901 31,696
----------------------------------------------------------------------------------------------------------------------------------
Restructuring gain and loss 112,807
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OPERATING INCOME 79,980 64,433 289,255 29,901 31,696
----------------------------------------------------------------------------------------------------------------------------------
Income from investment in associated comp. 10,868 490 12,098 7,030 378
Net financial income (expenses) 12,310 -8,096 -4,552 3,557 -2,299
----------------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE TAXES 103,158 56,827 296,801 40,488 29,775
----------------------------------------------------------------------------------------------------------------------------------
Taxes -31,306 -15,876 -89,223 -11,792 -9,060
----------------------------------------------------------------------------------------------------------------------------------
NET INCOME 71,852 40,951 207,578 28,696 20,715
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Balance Sheets
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
(AMOUNTS IN NOK 1000) 2000-06-30 1999-12-31 1999-06-30
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
R&D, purchased technology 43,018 21,431 21,395
Deferred tax assets 17,675 7,351 64,027
Goodwill 71,788
Property, plant and equipment 153,496 141,191 208,013
Financial non-current assets 345,624 271,291 206,545
---------------------------------------------------------------------------------------------------
NON-CURRENT ASSETS 631,601 441,264 499,980
---------------------------------------------------------------------------------------------------
Inventories 356,767 309,322 374,002
Trade receivables 600,530 592,548 778,242
Other receivables 222,021 445,847 363,458
Short-term shareholdings 2,300 2,300
Cash and cash equivalents 1,355,914 481,534 380,709
---------------------------------------------------------------------------------------------------
CURRENT ASSETS 2,537,532 1,831,551 1,896,411
---------------------------------------------------------------------------------------------------
TOTAL ASSETS 3,169,133 2,272,815 2,396,391
---------------------------------------------------------------------------------------------------
Shareholders' equity 1,933,601 969,508 827,966
Long-term liabilities 353,782 335,038 601,234
Current liabilities 881,750 968,269 967,191
---------------------------------------------------------------------------------------------------
TOTAL EQUITY AND LIABILITIES 3,169,133 2,272,815 2,396,391
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
INTEREST-BEARING CURRENT LIABILITIES 9,006 32,509 7,902
INTEREST-BEARING LONG-TERM LIABILITIES 236,265 226,456 484,546
---------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 8
NERA ASA
REPORT FOR FIRST HALF 2000
A strong and increasing momentum in the new business area Wireless Broadband
Access with signing of the first contracts, a solid order intake and
satisfactory operations are the main features of the first half-year. The Board
expect a continued healthy development of the group's operations, with about 20
percent growth in revenues and income in the Transmission Networks area, and an
operating margin of more than 10 percent on slightly lower revenues in the
Satellite Communications area for the year 2000. Our expectations of a strong
market in broadband access have been confirmed, and development of this area
will intensify. Nera has strong competencies in radio link and satellite
communications, a unique foundation for creating a successful Wireless Broadband
Access business.
KEY POINTS IN THE FIRST HALF-YEAR:
- The Wireless Broadband Access area has signed both the first contracts
with customers and strategic co-operation agreements with partners.
- Orders from Shin Sat, Modalen municipality and Eutelsat establishes Nera
in the broadband access market.
- OEM-contract with Breezecom gives Nera a broader range of products and
increased competitive strength.
- Technology partnership with ST Microelectronics gives Nera the
opportunity of leading the development of next generation interactive
satellite communications.
- 17 percent growth in revenues after adjusting for discontinued operations
- Satisfactory income from operations; 17 percent operating margin before
R&D
- Increased R&D effort - more than 10% of revenues
- Order intake up 29 percent for Transmission Networks area in the first
half-year, large cellular network contracts in England and Mexico signed
- Satellite Communications show solid sales of established products and new
opportunities arising from contract with ACeS.
INCOME STATEMENT, BALANCE SHEET, LIQUIDITY AND EQUITY
At the end of the first half of 2000 the Nera Group had revenues of NOK 1 163
million, compared to NOK 1 393 million in the first half of 1999. Taking in on
account that NOK 400 million in revenues in 1999 were from discontinued
operations, this is actually an increase in revenues by 17 percent on the
previous year.
Operating costs were NOK 939 million in the first half, compared to NOK 1 188
million last year. Operating margin before R&D were 17.2 percent, more than 4
percentage points better than in the first half of 1999. R&D expenditure was NOK
120 million, up from NOK 111 million in the same period last year. This
represent 10.3 percent of revenues, up 2.3 percentage points over last year's
first half. The increase in R&D reflects the need to develop products for the
broadband access market.
Operating income in the first half of 2000 was NOK 80 million, compared to NOK
64.4 million In the same period last year. That makes the operating margin 6.9
percent for the first half of this year. Earnings from associated companies was
NOK 10.9 million and net financial income was NOK 12.3 million. This yields a
pre-tax income of NOK 103.1 million compared to NOK 56.8 million in the first
half of 1999.
Net income is NOK 71.8 million, giving NOK 0.71 in earnings per share based on
an average shares outstanding in the period of 100.5 million.
1/4
<PAGE> 9
Nera's consolidated balance sheet as of June 30th, 2000 was NOK 3 169 million,
an increase from NOK 2 273 million at the end of 1999. The most significant
change arises from an increase in the equity of about NOK 1 billion, giving an
equity ratio of about 60 percent at the end of the half-year. The greater part
of this increase is attributable to the share issue in the beginning of May this
year. This netted NOK 882 million in new equity for the company. The number of
shares outstanding is now 122.8 million.
Payment for the new shares is also reflected in the increase in the cash balance
from NOK 482 million to NOK 1 356 million in the period. Acquisitions in the
U.S. have also contributed more than NOK 100 million of the increase in the
consolidated balance sheet during the period.
ORDER INTAKE AND BACKLOG
The order intake increased by 17 percent compared to the same period last year
adjusted for discontinued operations. In the first half of 2000 the Nera Group
booked orders in the amount of NOK 1 442 million. Especially Transmission
Network is showing strong growth in orders with an increase of 29 percent
compared to the same period last year.
Satellite Communications is on par with last year, and we are pleased to report
the first orders for Wireless Broadband Access.
The order backlog shows an increase of NOK 314 million in the second quarter
after removing NOK 183 million of orders following the termination of the
ICO-contract. Of the backlog NOK 517 million is to be delivered in the third
quarter and NOK 403 million in the fourth quarter this year.
PROSPECTS FOR THE FUTURE
The market for Wireless Broadband Access is developing rapidly, which was a main
reason for the share issue in the second quarter. Based on the opportunities
Nera has identified for growth in this area, the Company will intensify efforts
to target a leading position in this market. The board expects Wireless
Broadband Access to have costs of about NOK 100 million in the second half of
this year, and the effort to build this new area will continue into 2001.
As noted in the first quarter 2000 report the Transmission Networks area have
good prospects for growth. A growth of about 20 percent in both revenues and
income is expected in 2000 compared to 1999. As for Satellite Communications the
increase in sales of products is not expected to compensate fully for revenues
discontinued with the Airtime Billing operation, and the revenues are expected
to be somewhat lower than 1999, but with an operating margin of more than 10
percent. A global shortage of certain parts creates uncertainty, but as far as
we can see today this might be a limiting factor for satellite telephones only.
With the financial flexibility Nera enjoys, the Company continuously evaluates
structural opportunities. Securing a strong position in the emerging broadband
access market is paramount in the evaluation of acquisitions or other structural
changes.
DEVELOPMENTS IN THE BUSINESS AREAS
WIRELESS BROADBAND ACCESS
The business area was established earlier this year and has undergone a rapid
build up during the first half of this year, already counting 70 employees, and
co-operation agreements with many parties in various fields has been signed. The
first orders of a total of NOK 46 million have been booked. Costs amounted to
about NOK 20 million in the first half of 2000.
2/4
<PAGE> 10
Our expectations of a strong market in broadband access have been confirmed,
with especially the Scandinavian market as an early market. In the beginning the
marketing effort will be focused on the markets in the U.S. and Europe. One of
the first contracts covered earth stations for an interactive broadband
satellite system (Shin Sat), one of the first systems for interactive broadband
communications via satellite. In another contract, Nera has the responsibility
for implementing and supplying products in a broadband access network in a
Norwegian municipality (Modalen) - so far a unique project. Nera also signed a
contract with Eutelsat after the end of the half-year to supply a pilot DVB-RCS
system.
Velocity, the point-to-multipoint product developed by the Dallas, U.S. based
unit acquired from WorldAccess, is getting close to launch in the US-market
where it has been tested in the CLEC-market in the second quarter. A lot of
effort has been put into developing co-operation and OEM agreements in order to
build a competitive range of products. After the end of the quarter an
OEM-contract has been signed with Breezecom allowing Nera to use Breezecom
Point-To-Multipoint systems in addition to internally developed products.
Another contract of long-term importance is the co-operation with ST
Microelectronics, a leading global ASIC-supplier, on developing a new generation
technology for wireless broadband terminals.
The business area is undergoing a rapid build-up, and Nera expects costs of
about NOK 100 million in the second half, and at least as much next year.
SATELLITE COMMUNICATIONS
Satellite Communications had an order intake of NOK 327 million in the first
half this year, compared to NOK 521 million in the same period last year. This
amounts to a decline of NOK 40 million after adjusting for the sale of Airtime
Billing operation. There is still a strong demand for Nera WorldPhone and other
established products, but the Nera World Communicator breakthrough has not
materialised yet. Market shares for satellite telephones show a positive trend.
There is a lot of activity regarding new regional systems where Nera technology
can be used. At this point we have signed a MoU with ACeS regarding development
of a mobile data terminal for the system. The regional satellite systems
represent an extension of business opportunities for Nera.
The ICO development contract has been terminated in agreement with ICO. The cost
of the ICO-project totals NOK 90 million. The termination of the project has
made a positive contribution of NOK 7.5 million in the quarter. The project has
given Nera valued know how in miniaturization techniques, which will be useful
in other projects Nera is working on. As for ICO, the concept has changed, so
the previous development project had less relevance. The parties are agreed upon
resuming contact when ICO has developed its concept further.
Operating revenues for Satellite Communications was NOK 386 million in the first
half, compared with NOK 432 million last year. After adjusting for the divested
Airtime Billing unit, this year's revenue is about NOK 100 million higher than
the same period in 1999. Operating income for the business area was NOK 59.5
million, giving an operating margin of 15.4 percent.
TRANSMISSION NETWORKS
The order intake in the Transmission Networks area was NOK 1 004 million in the
first half, an increase of 29 percent on the previous year. Strong demand for
our products exists in most markets. Large orders from England and Mexico
contributed to a record high new order intake in the second quarter, and the
African market also came through with significant orders in this period.
The area had first-half sales of NOK 733 million, compared to NOK 671 million in
the first half of 1999. A strike and a large number of public holidays resulted
in lower efficiency in the production and lower volumes delivered.
3/4
<PAGE> 11
The product mix shows the SDH-link NL290 as the dominant product family, but
CityLink shows steady growth in volume. A number of customers have had CityLink
evaluation networks installed in the second quarter this year. The third quarter
will see start up of production in Brazil and this will have a positive effect
on operations.
The first-half operating income in the Transmission Networks area was NOK 50.5
million compared to NOK 36.5 million in 1999. This is an increase of about 30
percent and the area shows an operating margin of 6.9 percent. It was mainly the
operating income of Transmission Networks that suffered from the strike action
to the amount of NOK 10 million.
Board of Directors, Nera ASA, Bergen/Oslo, 2000-08-09
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