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Transmode AB: Interim Report January-March 2014

Stockholm, Sweden - 29 April 2014

January-March 2014

* Sales were SEK 231.3 (240.3) m, corresponding to a decrease of 3.8%, and
6.9% adjusted for exchange rate fluctuations.
* Operating profit was SEK 21.5 (41.1) m, corresponding to an operating
margin of 9.3% (17.1).
* Net profit was SEK 18.6 (31.9) m.
* Diluted and basic earnings per share were SEK 0.67 (1.15).
* Cash flow from operating activities was SEK 1.6 (59.7) m.

CEO's Statement: Clear strategy for profitable growth
Sales volume on our biggest market, EMEA, remained stable in the first quarter
of the year. Volumes remained low in the Americas, affecting overall sales
which totaled SEK 231 m. Although this was an improvement on the preceding
quarter, the figure was slightly down year-on-year. Gross margin remained
sound, and lower expenses compared to the previous quarter contributed to an
operating margin of 9.3%.

I retain my positive view of Transmode's market, even if growth can fluctuate
between individual quarters and regions. In order to capitalize more on
market opportunities and improve our growth rate and profitability, we're
continuing to implement a number of initiatives within our strategic

We're taking a combined approach to expanding outside Europe, and are
developing business with existing customers, approaching new customers and
simultaneously increasing our focus on partners. This is taking place within
the framework of our regional sales organization, which we introduced last
year. Our partners are an important channel for reaching enterprise customers
and smaller network operators, and we're focusing on developing existing
collaborations as well as identifying new partners.

Discussions are also underway with a number of large customers relating to
various niche applications such as Mobile Fronthaul and passive optical
infrastructure. This allows us to utilize the flexibility of our products to
approach new customer segments.

Our ambition is to lead the integration of Ethernet functionality in
packet-optical networks, and we launched several new products in the first
quarter. The new 100G Layer 2 Ethernet muxponder is the first of its kind on
the market.

We also launched a new generation of compact products in the quarter. Our
family of "Hex cards" improve the cost-efficiency and competitiveness of our
products for critical characteristics such as high density and low power

Underlying market growth remains positive, mainly driven by video traffic,
with many of our customers reporting annual traffic increases of 40-50%. Our
products, based on WDM and Ethernet technology in combination with fiber,
meet our customers' capacity needs. There are no signs to suggest that the
underlying drivers have changed, and our customers' long-term investment
needs remain substantial.

I'm confident that our growth strategy of focusing on geographical expansion,
innovative products and efficient operations will pay off. Transmode is in a
strong financial position with clear financial targets, and we're well
positioned for continued profitable growth.

Karl Thedéen, CEO, Transmode

The InterimReport is attached and available via the link at the end of this
press release.

The information in this announcement is required to be disclosed by Transmode
AB under the Swedish Securities Markets Act (Sw. lagen om
värdepappersmarknaden). This information was released for publication at
08:00 AM CET on 29 April 2014.

This is a translation of the Swedish original. In case of any inconsistency
between the Swedish and English version, the Swedish version shall prevail.

Invitation to press and analysts conference
Transmode AB will hold a conference call (in English) for the media, investors
and analysts on 29 Aprilat 09:00 AM CET where CEO Karl Thedéen, and CFO Johan
Wilsby, will present and comment on Transmode's Year-end Report.

To access the telephone conference, please call UK +44 (0)203 1940552
alternatively, call the Swedish number +46 (0)8 50556483 and state that you
are joining the "Transmode conference call" a few minutes before the
scheduled start. The conference and presentation can also be followed live
online, see Transmode's homepage:

For more information please contact:

Ola Elmeland
Vice President Marketing&Communications
Transmode Systems AB
Telephone: +46 8 506 882 71

About Transmode
Transmode is a global provider of packet-optical networking solutions that
enable fixed line and mobile network operators to cost effectively address
the capacity needs created by the rapid growth in video and data traffic.
These solutions are important building blocks in next-generation high-speed
optical networks that support services such as broadband backhaul, mobile
data backhaul, video delivery services and cloud computing. Transmode's
solutions are designed to increase the capacity, flexibility and
functionality of metro and regional networks and are based onWavelength
Division Multiplexing(WDM) and transport technologies such as Ethernet.
Transmode'sNative Packet Optical 2.0architecture gives customers key
advantages such as cost efficient Ethernet services, ultra-low latency, low
power consumption and future proof network design.

Transmode is headquartered in Stockholm, Sweden and is listed on the NASDAQ
OMX Stockholm Exchange (TRMO). Since 2000 the company has installed more than
40,000 systems for over 500 fixed andmobilenetwork operators, service
providers, large enterprises and public institutions in over 45 countries
across the globe.

For additional information about Transmode, please

Interim Report January-March 2014


This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Transmode via Globenewswire


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