MONTREAL, QUEBEC - (Marketwire - May 5, 2010) - Miranda Technologies Inc. (TSX:MT), a global developer, manufacturer and marketer of high-performance hardware and software for the television broadcast industry, today reported results for the first quarter ended March 31, 2010.
Highlights: Q1 2010 versus Q1 2009
-- Revenues of $29.0 million, versus $33.2 million in 2009; excluding the
impact of foreign exchange sales were up 1%
-- EBITDA(1) of $0.7 million, down from $3.8 million in 2009; results
impacted by a $1.9 million foreign exchange loss in 2010
-- Net loss of $1.7 million or 7 cents per fully diluted share, compared to
net income of $1.1 million or 5 cents per share respectively in 2009
-- Gross margin as a percentage of sales was 58%, versus 59% in 2009
(1) Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP financial measure. See comment on non-GAAP financial measures which follows.
First quarter revenues came in at $29.0 million, declining 13% versus 2009. Excluding the negative impact of foreign exchange, sales were up 1%, driven largely by strong sales internationally and in Canada. The Company reported a quarterly net loss of $1.7 million or 7 cents per diluted share, compared to net income of $1.1 million and 5 cents respectively last year. Quarterly results were impacted by a foreign exchange loss of $1.9 million, compared to a gain of $0.6 million in 2009. Gross margins improved over recent quarters, rising to 58% of sales for the first quarter. Cash generation remained strong, with quarterly cash flows from operating activities coming in at $5.1 million. Cash, cash equivalents and temporary investments were $52.4 million at quarter end, up from $49.2 million at the end 2009.
"Removing unfavourable movements in foreign exchange, sales volume was as we expected," commented Strath Goodship, Miranda's President and Chief Executive Officer. "International sales are becoming increasingly robust and we saw a sharp improvement in sales in Canada this quarter. As well, the gross margin came in at the highest level seen in recent quarters, driven by favourable product and customer mix. As the year progresses, we expect to see improvements in demand."
Other Highlights
In April, Miranda attended the National Association of Broadcasters (NAB) show and showcased several new innovative products. These included 3DTV multiviewer, channel branding and signal processing products; the Kaleido-Modular card-based multi-viewer; new automatic loudness monitoring and control solutions; electronic lip-sync monitoring capabilities for the iControl facility monitoring system; and new enterprise class routers with integrated audio processing.
With the recent rise of 3DTV, Miranda was part of All Mobile Video's (AMV) presentation at NAB of their new outside broadcast stereoscopic 3DTV production truck which uses Miranda multiviewers for 3D/2D monitoring as well as Miranda's interfacing equipment, including the new 3DX-3901 3D signal processor.
"We received a lot of customer interest across our product lines and with our strong breadth of product offerings we are well placed to capitalize on continued improvements in broadcast markets," commented Mr. Goodship. "We have introduced many industry firsts over the past 20 years and this year was no exception, with Miranda receiving further industry recognition with two NAB show awards for our automatic loudness control solutions and our Densite 3DX-3901 Stereoscopic 3D video processor."
Just ahead of the NAB show, SENSIO and Miranda announced a partnership to develop a suite of high-performance broadcast products to enable end-to-end, Stereoscopic 3D playout. The Densite 3DX-3901, launched at NAB, is the first Miranda product equipped with SENSIO technology. Miranda offers a range of Stereoscopic 3D products which simplify the transition to 3DTV production and playout and will strengthen its support for SENSIO 3D with upcoming product releases.
Year-over-year quarterly operating review: Q1 2010 versus Q1 2009
Revenue
Revenues totalled $29.0 million for the quarter, down 13% from 2009. Excluding foreign exchange, quarterly sales were up 1% from 2009.
Once again, International markets continued to drive growth, increasing 26% over Q1 2009. In North America, sales in Canada picked up significantly over levels seen in recent quarters, coming in 116% higher than last year. Sales in the United States declined 50%, reflecting continued weakness in US broadcast markets. Canada, the United States and Other Countries generated 10%, 32% and 58% of quarterly sales respectively.
Gross Margin
Gross margin as a percentage of sales was 58% for the quarter, down one percentage point from last year.
Operating Expenses
Selling, General & Administrative expenses (SG&A) were down 16% from 2009, to $10.4 million, reflecting the full impact of our cost reduction initiatives introduced during 2009 and the favourable impact of foreign exchange on SG&A expenses denominated in foreign currencies. SG&A as a percentage of sales was 36%, down from 37% last year.
Research and Development (R&D) investments were down 5% over 2009, coming in at $5.8 million. R&D as a percentage of sales stood at 20%, up from 18% in 2009.
A foreign exchange loss of $1.9 million was recorded for the quarter, compared to a gain of $0.6 million in 2009. The loss largely reflects the impact of a stronger Canadian dollar in the translation of foreign currencies.
Net (Loss) Income and EBITDA
The Company reported a net loss for the quarter of $1.7 million or 7 cents per fully diluted share. This compares to net income of $1.1 million and 5 cents per share respectively in 2009.
EBITDA for the quarter was $0.7 million or 2% of sales, compared to $3.8 million and 12% of sales in 2009. EBITDA and net loss for the period were negatively impacted by the $1.9 million foreign exchange loss recorded during the quarter.
Liquidity and Capital Resources
Operating activities generated $5.1 million of cash flows during the quarter, compared to $3.4 million in Q1 last year. As of March 31, 2010, cash, cash equivalents and temporary investments were $52.4 million, up from $49.2 million at the end of 2009.
Outlook
"We continue to believe that broadcast markets have stabilized, however the timing and strength of a rebound remains uncertain," commented Mr. Goodship. "Sales momentum in International markets continues to build and we are seeing signs of a broad based recovery. Sales activity in North American markets, particularly the USA remains constrained, although we are hopeful the heightened product interest seen at NAB will translate into stronger revenues in these markets going forward. The new products introduced at NAB, along with a number of sporting and political events in 2010 should help drive revenues and position us for growth."
Miranda's Annual General Meeting will be held at 10:00 a.m. (local time) on Wednesday, May 5, 2010 at the Queen Elizabeth Hotel, 900 Rene Levesque Blvd. West, Montreal, Quebec.
Conference call
Miranda Technologies Inc. (TSX:MT) will hold a conference call with financial analysts to present its first quarter 2010 results on Wednesday, May 5, 2010, at 2:00 p.m. (ET). Media and other interested parties are invited to join the conference call in listen-only mode.
DATE: Wednesday, May 5, 2010
TIME: 2:00 p.m. Eastern Time
(416) 981-9000 (for all Toronto and overseas
CALL: participants)
(800) 764-8268 (for all other North American callers)
(Please dial in 15 minutes before the conference
begins)
WEBCAST: On line at www.miranda.com or www.marketwire.com.
The webcast of the conference call will be available for a period of 90 days at www.miranda.com and www.marketwire.com. A recording of the conference call will also be available from 4:00 p.m. on Wednesday, May 5, 2010 to 11:59 PM on Wednesday, May 12, 2010 and can be accessed by dialling 1-800-558-5253 and entering the pass code 21466079# on your telephone keyboard.
Non-GAAP Financial Measures
We use EBITDA (earnings before interest, taxes, depreciation and amortization) to compare our operating results from one period to another. EBITDA is not an earnings measure recognized by GAAP and does not carry standard prescribed significance for GAAP. Our method for calculating EBITDA may differ from that used by other companies under the same designation. The reader is advised that EBITDA should not be substituted for determining net income as an indicator of operating results in line with GAAP, neither for cash flows from operating and investing activities as a measure of liquidity and cash flows. Please refer to the reconciliation of net (loss) income to EBITDA in the following table.
Reconciliation of Net (Loss) Income to EBITDA
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(in thousands of Canadian dollars) Quarters ended March 31,
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2010 2009
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Net (loss) income (1,668) 1,087
Interest (income) expense (12) 121
Income taxes expense 423 653
Amortization of property, plant &
equipment 860 862
Amortization of intangible assets 1,068 1,111
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EBITDA 671 3,834
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Forward-looking Statements
This media release contains forward-looking statements reflecting Miranda's objectives, estimates and expectations. Such statements may be marked by the use of verbs such as "believe", "anticipate", "estimate", "looking ahead" and "expect", as well as the use of the conditional or future tense. By their very nature, such statements involve risks and uncertainties. Consequently, results could differ materially from the Company's expectations. Risks that could cause results to differ materially from Miranda's expectations are discussed under the heading Risk Factors in the Company's Annual Information Form, which is available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release represent Miranda's current expectations and, accordingly, are subject to change. However, the Company disclaims any intention and assumes no obligation to update or revise any forward-looking statement, whether as a result of new information or events or otherwise, unless required to do so by the applicable securities legislation.
About Miranda
Miranda Technologies Inc. (TSX:MT) develops, manufactures and markets high-performance hardware and software for the television broadcast industry. Its solutions are purchased by content creators, broadcasters, specialty channels and television service providers to enable and enhance the transition to a complex multi-channel digital and HD broadcast environment. This equipment allows customers to generate additional revenue while reducing costs through more efficient distribution and management of content as well as the automation of previously manual processes. Miranda employs approximately 550 people at its Montreal headquarters and in its facilities located in Wallingford (UK), Grass Valley (California, USA), Paris (France), Tokyo (Japan), Zaltbommel (Netherlands), Dubai (United Arab Emirates), Beijing (China) and Hong Kong. Miranda is listed on the Toronto Stock Exchange. For more information, please visit www.miranda.com.
MIRANDA TECHNOLOGIES INC.
Consolidated Balance Sheets
March 31, 2010 and December 31, 2009
(In thousands of Canadian dollars)
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March 31, December 31,
2010 2009
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(Unaudited) (Audited)
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Assets
Current assets:
Cash and cash equivalents $32,450 $29,264
Temporary investments 19,904 19,904
Accounts receivable 18,010 24,955
Inventories 17,289 14,512
Income taxes and tax credits receivable 5,829 5,808
Prepaid expenses 1,639 1,552
Future income taxes 841 979
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95,962 96,974
Tax credits receivable 2,680 1,870
Property, plant and equipment 30,561 30,725
Intangible assets 19,166 20,234
Goodwill 20,562 20,562
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$168,931 $170,365
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Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued charges $16,582 $16,261
Deferred revenue 2,084 2,327
Income taxes payable 1,860 1,239
Current portion of long-term debt 9 9
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20,535 19,836
Deferred revenue 3,339 3,601
Long-term debt 134 136
Future income taxes 10,192 10,489
Shareholders' equity:
Share capital (note 3) 103,165 103,165
Contributed surplus (note 3) 4,587 4,491
Retained earnings 26,979 28,647
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134,731 136,303
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$168,931 $170,365
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MIRANDA TECHNOLOGIES INC.
Consolidated Statements of Operations and Comprehensive (Loss) Income
(Unaudited)
Three-month periods ended March 31, 2010 and 2009
(In thousands of Canadian dollars, except per share amounts)
------------------------------------------------------------------------
------------------------------------------------------------------------
2010 2009
------------------------------------------------------------------------
------------------------------------------------------------------------
Sales $28,973 $33,210
Cost of sales 12,259 13,574
------------------------------------------------------------------------
16,714 19,636
Operating expenses:
Selling, general and administrative 10,382 12,406
Research and development 5,761 6,043
Research and development tax credits (1,228) (1,483)
Interest (income) expense (12) 121
Foreign exchange loss (gain) 1,911 (631)
Stock-based compensation (note 3 (b)
(i)) 96 290
Other stock-based compensation (note 3
(b) (ii), (iii) and (iv)) (19) 39
Amortization of intangible assets 1,068 1,111
------------------------------------------------------------------------
17,959 17,896
------------------------------------------------------------------------
(Loss) income before income taxes (1,245) 1,740
Income taxes (recovery):
Current 734 830
Future (311) (177)
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423 653
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Net (loss) income and comprehensive (loss)
income $(1,668) $1,087
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Net (loss) earnings per share (note 3
(c)):
Basic $(0.07) $0.05
Diluted (0.07) 0.05
------------------------------------------------------------------------
------------------------------------------------------------------------
Basic weighted average number of shares
outstanding (note 3 (c)) 22,837,648 23,296,089
Diluted weighted average number of shares
outstanding (note 3 (c)) 22,837,648 23,561,347
------------------------------------------------------------------------
------------------------------------------------------------------------
MIRANDA TECHNOLOGIES INC.
Consolidated Statements of Cash Flows
(Unaudited)
Three-month periods ended March 31, 2010 and 2009
(In thousands of Canadian dollars)
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2010 2009
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Cash flows from operating activities:
Net (loss) income $(1,668) $1,087
Adjustments for:
Amortization of property, plant and
equipment 860 862
Amortization of intangible assets 1,068 1,111
Stock-based compensation 96 290
Future income taxes (311) (177)
Effect of exchange rates on long-term
monetary assets and liabilities 152 848
Effect of exchange rates on cash and
cash equivalents 978 (88)
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1,175 3,933
Net change in non-cash balances related to
operations 3,938 (564)
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5,113 3,369
Cash flows from financing activities:
Repayment of long-term debt (2) (736)
Redemption of shares - (1,914)
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(2) (2,650)
Cash flows from investing activities:
Net decrease in temporary investments - 47
Restricted cash - 25,000
Additions to property, plant and equipment (947) (1,144)
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(947) 23,903
Effect of exchange rates on cash and cash
equivalents (978) 88
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Net increase in cash and cash equivalents 3,186 24,710
Cash and cash equivalents, beginning of
period 29,264 46,449
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Cash and cash equivalents, end of period $32,450 $71,159
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Cash and cash equivalents are comprised of:
Cash $25,874 $51,297
Cash equivalents 6,576 19,862
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$32,450 $71,159
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Supplemental cash flow information:
Property, plant and equipment financed by
accounts payable $251 $-
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