Option reports Third Quarter 2009 results, planned capital increaseand additional cost reductions

* Third quarter revenues of EUR 35.7 million, gross margin up to
    30.3%,
  * EBIT of EUR -6.7 million and net result of EUR -8.4 million
  * Additional restructuring with non revenue related operating
    expense savings of EUR 20 million
  * Capital increase of approximately EUR 20 million
  * Strategy to move away from commoditized hardware
 
Leuven, Belgium - October 29, 2009 - Option N.V. (EURONEXT  Brussels:
OPTI; OTC: OPNVY), the  wireless technology company, today  announces
its results  for  the third  quarter  ended 30  September  2009.  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.
 
Cost Reduction Plan
 
In March, Option  announced a  plan to  reduce quarterly  non-revenue
related operating expenses of EUR 21.3 million in Q4 2008 by 20%.  At
the end of Q3 2009, Option  had significantly exceeded this plan  and
has reduced quarterly operating  costs by 35%  to EUR 13.8  million.
Continuing its operational alignment with the strategy, Option is  to
carry out a further  cost reduction plan. The  new plan envisages  an
additional EUR  20 million  savings in  operating expenses  for  2010
compared to the annualized Q3 2009 run-rate. Option has the intention
to proceed with the following measures to implement this plan:
 
  * The intention to proceed a collective dismissal of 55 employees
    at Leuven HQ that has been communicated to the works council
  * Moving further to an outsourced customization and fulfilment
    model in China, which will result in a shift from a fixed to
    variable customization cost base and materially lower inventory
    levels
  * Selectively outsourcing non-core engineering tasks and
    consolidating existing R&D capabilities and facilities. In the
    latter respect, the core of the activities of the R&D facility at
    Kamp-Lintfort (Germany) will be transferred to the Leuven R&D
    site before year-end and the company has announced its intention
    to close the Kamp-Lintfort site.
  * Creating a leaner and more focused sales and marketing
    organization
  * Streamlining and simplifying operations through additional
    headcount reduction across all sites and further non HR-related
    cost reductions
 
Related  to   this  additional   restructuring  plan,   the   company
anticipates approximately  EUR  7 million  of  one-off  restructuring
costs in Q4 2009.
 
Capital Increase
 
The Company has approved a  capital increase of approximately EUR  20
million which will be used to  support the costs associated with  the
further transformation  of  the  Company. The  Company  is  currently
assessing different alternatives. Further details will be provided at
the appropriate time.
 
Strategy
 
The strategy is to explicitly focus on a move away from  commoditized
hardware to a fully integrated offering for mobile broadband markets:
 
  * For the USB modem market ('attached solutions'): a focus on
    delivering innovative integrated solutions based on, software,
    services and hardware. This is a clear shift away from
    commoditized hardware. This also includes a sales refocus on
    network operators valuing innovation, customization and
    flexibility and an expansion beyond operators to new types of
    customers such as communities, content/service providers and
    Mobile Virtual Network Operators.
 
  * For embedded modules ('embedded solutions'): a shift from the
    simple integration of a module to offering high-value services to
    device manufacturers. Option is bringing these solutions to
    mobile internet devices (MIDs) and consumer/professional
    electronic devices such as e-readers, gaming consoles and digital
    cameras.
 
Other
 
Option announces that Chip Frederking, Vice President Sales Americas,
has been promoted to Vice President Global Sales. Chip joined  Option
in mid 2008 and has been  instrumental in its development in the  US.
Before joining Option, Chip worked for 20 years for Motorola where he
held various  sales management  positions. Filip  Buerms,  previously
Vice President Global  Sales, has  left the Company  to pursue  other
opportunities.
 
Financial Highlights of the third quarter 2009
 
  * Total revenues for the third quarter of 2009 were EUR 35.7
    million, compared to EUR 60.3 million realized in the third
    quarter of 2008.
 
  * Gross margin for Q3 2009 was 30.2% of total revenues, compared to
    26.6% for Q3 2008. There was, however, a substantial increase in
    gross margin (excluding restructuring charges) compared to Q2
    2009, from 20.9% to 30.3% driven by favorable exchange rates and
    continuing manufacturing optimizations.
 
  * Compared to Q3 2008, Q3 2009 operating expenses decreased by EUR
    5.3 million excluding restructuring charges, from EUR 22.8
    million to EUR 17.5 million. The decline is mainly due to cost
    reductions and lower sales related costs. Compared to Q2 2009,
    operating expenses (excluding restructuring charges) continued to
    decline from EUR 18.3 million to EUR 17.4 million.
 
  * Quarterly EBIT amounted to EUR -6.7 million or -18.9% of total
    revenues compared to EUR -6.8 million or -11.2% for the
    corresponding period in 2008. Compared to Q2 2009, the Q3 2009
    quarterly negative result from operations (EBIT excluding
    restructuring charges) decreased from EUR -9.7 million to EUR
    -6.7 million.
 
  * Net result for Q3 2009 amounted to EUR -8.9 million, or EUR -0.22
    per basic share. This compares with a net result of EUR -2.9
    million, or EUR -0.07 per basic share, for Q3 2008. The Q3 2009
    net result was negatively impacted by a financial result of EUR
    -1.6 million primarily due to the continued effect of the
    weakness of the US dollar against the Euro on bank accounts and
    remaining hedging contracts. This compares to EUR -4.5 million in
    Q2 2009.
 
  * In Q3 2009, the company stopped accounting for positive tax
    results as the deferred taxes on the balance sheet represent 22%
    of the total assets. The company has determined that it is
    prudent to cap the deferred tax asset at this level. If a
    positive tax effect had been included, the net result would have
    improved by EUR 4.3 million to -4.7 million.
 
  * The Group's balance sheet includes EUR 26.5 million in cash, of
    which EUR 10.8 million has been drawn from existing credit lines.
    This compares with a cash position of EUR 28.2 million as of 30
    June 2009, of which EUR 7 million was from existing credit lines.
    The accounts payable and receivable positions decreased compared
    to year end 2008, and the average days outstanding on receivables
    for the third quarter decreased to an average of 47 days net of
    subcontracting parties.
 
Financial Highlights of the year to date result 2009
 
  * Total year to date revenues were EUR 127.7 million, a decrease of
    35.5% compared to EUR 197.9 million revenues realized during the
    comparable period in 2008.
 
  * Year to date gross margin was EUR 32.3 million or 25.3% of total
    revenues, compared to EUR 57.7 million or 29.1% in 2008.
    Excluding the year to date restructuring charge of EUR 407
    thousand in 2009, the gross margin would have been 25.6%.
 
  * Year to date EBIT decreased to EUR -27.2 million or -21.3% of
    total revenues, including the year to date restructuring charge
    of EUR 1.7 million, compared to EBIT of EUR -10.3 million for the
    corresponding period in 2008.
 
  * Net result decreased to EUR -25.8 million, or EUR -0.62 per basic
    share. This compares with a net result of EUR -5.7 million, or
    EUR -0.14 per basic share, in 2008. The 2009 net result was
    positively impacted by taxes of EUR 6.9 million and negatively
    impacted by a finance result of EUR -5.6 million.
 
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