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Thielert AG

Thielert: New date for Publication of Annual Results 2006

Hamburg (euro adhoc) -

  ots.CorporateNews transmitted by euro adhoc. The issuer is responsible for
  the content of this announcement.
companies/Annual Report
Thielert AG is rescheduling the publication of
the audited annual results 2006 from March 28, 2007 to April 13, 
2007. This decision was necessary, because the company will now book 
development services in accordance with IAS 11.23, whereas until now 
these contracts have been booked in accordance with IAS 18.13 
(multi-component contracts). The auditors are in full agreement with 
this change, which represents a more conservative accounting 
treatment. As a result, more time is needed to carry out the 
necessary restatements.
Part of the revenues from development services, which were recorded 
in the income statement in 2006 within the framework of combined 
development and production supply contracts according to IAS 18.13, 
will now, following this decision, be recorded once full production 
runs begin. As a consequence, there will be a postponement of 
revenues and earnings from 2006 to 2007 and subsequent years. The 
company expects that this change in accounting will result in 
postponed revenues of approximately 12 million Euros from 2006 to 
2007 and beyond. There will be a similar postponement of about 5 
million Euros in pretax income. There will be no impact on operating 
cash flow.
Even taking this postponement into account, an increase in revenues 
of approximately 60 percent was achieved in 2006. The company sees no
change in the operating success of its products and expects further 
growth of at least 50 per cent in sales and earnings.
Background
Generally speaking, there exist two different contract types with our
key customers:
1. Development contracts with clear development objectives and with 
an independent contract for the supply of full production runs. This 
type of contract is used particularly in the case of defense 
engineering customers and customer-specific development work. Such 
development services are renumerated separately and independently 
from any supply for production runs.
2. Combined development and production run supply contracts in which 
the primary focus is on the supply of the production runs. In this 
case,  development services are renumerated through payments for 
production run supplies.
During the years up to and including 2005 no development revenues 
were booked under contract type 2. In the years 2001 to 2005 
development revenues were capitalized, in accordance with IAS 38, but
only once the developed products were ready for launch and 
applications for certifications were submitted to the authorities and
once the market potential could be precisely estimated. Research 
services and general development services were not capitalized at any
time.
In 2006 two new engines, the Centurion 2.0 and the Centurion 4.0, 
were developed ready for launching and were certified. The normal 
production run was started and some engines were even shipped to OEM 
customers. In addition, significant sums were invested in upgrading 
and expanding production capacity to satisfy strong demand.
Ahead of the start of full production runs, the company had decided 
to book the considerable customer-specific development services as 
multi-component business according to IAS 18.13 in order to record 
earnings during the same period as the services rendered as much as 
possible. Such a procedure is also used by other engine manufacturers
and is thus standard practise in the industry.
However, during the audit of the annual accounts the company and its 
auditors concluded that these combined development and 
supply-contracts should be recognized as a single contract and the 
development revenues should be accounted for according to the 
"cost-to-cost" method. Most development services are therefore 
recorded as revenue and income only once production runs have begun.
As a result of accounting according to IAS 11.23, revenues of 12 
million Euros will be postponed from 2006 to 2007 and subsequent 
years. This is a more conservative accounting treatment that will 
also be used in the future. There will be no negative effect on 
income over the coming years, since development of only one new 
engine is planned for the next five years. 2006 was therefore an 
exceptional year in this respect since two engine types were launched
at the same time.
Following the FAA certification of the Centurion 2.0 on 12th March 
2007 for the installation in all important Cessna 172 models in the 
US, a fleet of 40,000 airplanes can be retrofitted now. This results 
in an annual retrofit potential of approx. 4,000 units. The Centurion
2.0 has also been certified for the Piper PA28 at the 23rd March 2007
by EASA. A validation in the USA is expected soon, because the 
Centurion 1.7 and its installation in the PA28 are already certified.
The Centurion 4.0 was certified by the EASA for the installation in 
the Cirrus SR 22 on 12th February 2007 already. The certification of 
the 4.0 for the Cessna 206 is expected in the next days. These two 
certifications will open the market for deliveries of the 4.0 engine.
This change in our accounting practises will not have a lasting 
impact on profitability; it results in the postponement of revenues 
and income as well as in a one time effect in 2006. The sales volume,
revenue and profit forecasts of the company remain unchanged.
There will be a positive impact on working capital as a result of 
this change in accounting practise. There is no impact on operating 
cash flow. The company remains in full compliance with all governance
ratios with its banks.
The company is confident that it will be able to publish the annual 
accounts with an unqualified opinion from its auditors on 13th April 
2007.
end of announcement                               euro adhoc 26.03.2007 07:32:09

Further inquiry note:

Sebastian Wentzler
Head of Corporate Communication
Telefon: +49(0)40/696950-35
E-Mail: press@thielert.com

Branche: Machine Manufacturing
ISIN: DE0006052079
WKN: 605207
Index: SDAX, CDAX, Prime All Share, Classic All Share
Börsen: Frankfurter Wertpapierbörse / official dealing/prime standard
Börse Berlin-Bremen / free trade
Hamburger Wertpapierbörse / free trade
Baden-Württembergische Wertpapierbörse / free trade
Börse Düsseldorf / free trade
Bayerische Börse / free trade

Original-Content von: Thielert AG, übermittelt durch news aktuell

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