Miranda Technologies Inc.
TSX : MT

Miranda Technologies Inc.

February 23, 2006 06:00 ET

Miranda reports fourth quarter and fiscal year 2005 results

MONTREAL, Feb. 23 - 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
fourth quarter and full fiscal year ended December 31, 2005.



Highlights
----------

- Sales increased 32% in the quarter and 31% in fiscal year 2005
- EBITDA(1) reached $7.7 million for the quarter and $23.5 million for
the year
- Net earnings were $4.9 million for the quarter and $16.4 million for
the year
- Fully diluted net earnings per share stood at $0.23 for the quarter and
$0.83 for the year


In the fourth quarter, revenues were $27.3 million, an increase of
$6.6 million or 32% over the same period last year, while fiscal 2005 revenues
were $96.5 million, an increase of $22.9 million or 31% over the previous
year. This significant increase in sales, both for the quarter and for the
year, is the result of the rising adoption of the Company's products and
solutions, particularly in projects involving upgrading to HDTV (High
Definition Television) formats, as well as for monitoring and control systems
for IPTV (Internet Protocol Television) projects.

Net earnings from continuing operations were $4.9 million in the fourth
quarter of 2005 compared with $7.4 million in the corresponding period in
2004, which included non-recurring gains. For the full year 2005, net earnings
from continuing operations were $16.4 million, compared with $16.8 million in
2004. Both years included non-recurring gains. Earnings per share (EPS) were
$0.23 in the fourth quarter of 2005 compared with $0.39 in the same period in
2004, and were $0.83 for the twelve-month period ended December 31, 2005,
compared with $0.99 for the same period in 2004.

Income from continuing operations before restructuring, other and income
taxes grew from $13.3 million in 2004 to $23.5 million in 2005, which included
$4.0 million of incremental R&D tax credits, a non-recurring event related to
previous years' unrecorded R&D tax credits. On a fully diluted basis, it
represents an after tax gain of $0.14 per share.

EBITDA, which the Company considers a more appropriate measure of its
performance, increased both during the quarter and the year.



Reconciliation of net income to EBITDA

Quarter ended Year ended
December December December December
31, 2005 31, 2004 31, 2005 31, 2004
-------------------------------------------------------------------------
Net income 4,916 7,417 16,357 18,826
Interest 59 247 508 1,321
Income taxes 1,803 (3,873) 7,483 (2,707)
Depreciation 458 390 1,594 1,497
Amortization of intangible
assets 460 459 1,837 1,836
-------------------------------------------------------------------------
EBITDA before non-recurring
items 7,696 4,640 27,780 20,773
Net income from discontinued
operations - - - (2,046)
Previous year's investment
tax credit recorded
in period - - (4,000) -
Restructuring charge
(reversal) - 706 (300) 706
Other - 200 - (1,464)
-------------------------------------------------------------------------
EBITDA excluding non-recurring
items 7,696 5,546 23,479 17,969


Excluding non-recurring items, EBITDA was $7.7 million in the fourth
quarter of 2005 compared with $5.5 million in the fourth quarter of 2004, an
increase of 39%. This increase was realised despite the recording of a foreign
exchange loss of $0.7 million due to the strength of the Canadian dollar
versus other currencies. Selling, general and administrative expenses
increased $1.1 million in the fourth quarter of 2005 compared with the
corresponding quarter in 2004 due to sales growth and the recording of
expenses related to operating as a public company.

For the twelve-month period ended December 31, 2005, EBITDA reached
$23.5 million, at 24% of sales, compared with $18 million in 2004, at 24% of
sales, representing an increase of 31%. The percentage increase in EBITDA was
equal to the percentage increase in sales despite the additional investments
in R&D, which grew 38% in fiscal 2005.

"We directly benefited from an escalating demand from broadcasters
worldwide for HDTV equipment," said Mr. Strath Goodship, Miranda's President
and Chief Executive Officer. "Broadcasters are finally selecting HDTV as their
format of choice for major sporting and political events. For instance,
Miranda is providing significant HDTV equipment to major broadcasters for the
2006 Torino Winter Games which, for the first time, are being entirely
simulcast in HD. This is the first worldwide showcase for HD and we are
thrilled to be part of it," added Mr. Goodship.

Strong growth was achieved throughout the year in all territories served
by the Company. Sales increases reached 40% when adjusted for the exchange
rate variation, both for the quarter and for the year. This variation was due
to the strengthening of the Canadian dollar against the US dollar, the Euro,
the British pound and the Yen, currencies that have declined versus the
Canadian dollar in 2005. The variation in the exchange rate negatively
impacted Miranda's sales by $1.7 million and $6.7 million respectively in the
fourth quarter and fiscal 2005.

The year produced strong cash flows. In addition to the $45.1 million
raised as a result of the IPO in December 2005, the Company generated
$16.5 million from operating activities. The balance of long-term debt was
fully repaid in the last quarter and as a result, the Company's cash position
stood at $58.7 million at the end of 2005.

Forward-looking Statement

This press 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 conditional or future
tense. By their very nature, such statements involve risks and uncertainty.
Consequently, results could differ materially from the Company's expectations.
Our business remains subject to the risk factors described in our prospectus
dated November 30, 2005 under the heading "Risk Factors" and there can be no
assurance that we will be able to complete any acquisition. The forward-
looking statements contained in this press release represent our current
expectations and, accordingly, are subject to change. However, we disclaim any
intention and assume no obligation to update or revise any forward-looking
statements, whether as a result of new information or events or otherwise.

Conference Call

Miranda Technologies Inc. will hold a conference call with financial
analysts to present its fourth quarter and fiscal year 2005 results today at
10:00 a.m. (Eastern Standard Time). Those interested should call
(514) 940-2795 (Montreal or overseas) or 1 800 814-4862 (elsewhere in North
America). The call can also be accessed via a direct broadcast site at the
following addresses: www.miranda.com/investors, www.cnw.ca and www.q1234.com.

Those unable to participate can hear a recording of the call by dialing
1 877 289-8525 and entering the code 21177676(pound key) on the telephone
keypad. This recording will be accessible from 1:00 p.m. on Thursday,
February 23, 2006 until 11:59 p.m. on Thursday, March 2, 2006. The webcast of
the conference call will also be available during a period of 60 days at
www.miranda.com/investors, www.cnw.ca and www.q1234.com.

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 HDTV broadcast environment. This
equipment allows customers to generate additional revenue while reducing costs
through the more efficient distribution and management of content as well as
the automation of previously manual processes. Miranda employs over 350 people
at its Montreal headquarters and in its offices located in Wallingford (UK),
Paris (France), Tokyo (Japan), Hong Kong, Beijing (China) and Springfield (New
Jersey). Miranda became a public company on December 8, 2005 and is listed on
the Toronto Stock Exchange. For more information, please visit
www.miranda.com.



-----------------------------
(1) The Company uses EBITDA (earnings before interests, taxes,
depreciation and amortization) to compare performance from one period to
another. In doing so, it excludes certain items (interests, taxes,
depreciation and amortization) as well as restructuring, other non-
recurring items and discontinued operations, which it views as outside
its core operating results. EBITDA is not an earnings measure recognized
by Canadian generally accepted accounting principles (GAAP) and does not
have a standardized meaning prescribed by GAAP. Our method of calculating
EBITDA may differ from the method used by other issuers and, accordingly,
our EBITDA may not be comparable to similarly titled measures used by
other issuers. (See reconciliation of net income to EBITDA).


The selected consolidated financial information set out below for the
fiscal years ended December 31, 2005 and 2004 is unaudited, presented in
Canadian dollars and prepared in accordance with Canadian generally accepted
accounting principles.



-------------------------------------------------------------------------
Miranda Technologies Inc.
Consolidated statements of earnings
(in thousands of Canadian dollars, except for earnings per share data)

Quarter ended Year ended
December December December December
31, 2005 31, 2004 31, 2005 31, 2004
----- unaudited ------ ----- unaudited ------
-------------------------------------------------------------------------

Sales 27,328 20,732 96,503 73,607
Cost of sales 10,127 7,616 37,439 27,913
-------------------------------------------------------------------------
-------------------------------------------------------------------------
17,201 13,116 59,064 45,694

Selling, general and
administrative 6,566 5,470 24,092 20,568
Research and development 3,501 2,834 12,883 9,323
Research and development
tax credits (875) (400) (6,000) (1,600)
Interest 59 247 508 1,321
Foreign exchange loss (gain) 654 (58) 1,747 778
Stock-based compensation 117 114 457 153
Amortization of intangible
assets 460 459 1,837 1,836
-------------------------------------------------------------------------
10,482 8,666 35,524 32,379
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Income from continuing
operations before
restructuring charge,
other and income taxes 6,719 4,450 23,540 13,315
Restructuring charge - 706 (300) 706
Other - 200 - (1,464)
-------------------------------------------------------------------------
Income from continuing
operations before
income taxes 6,719 3,544 23,840 14,073
Income taxes:
Current 390 679 4,610 1,845
Future 1,413 (4,552) 2,873 (4,552)
-------------------------------------------------------------------------
1,803 (3,873) 7,483 (2,707)
Net income from continuing
operations 4,916 7,417 16,357 16,780
Income from discontinued
operations - - - 2,046
-------------------------------------------------------------------------
Net income 4,916 7,417 16,357 18,826
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Net earnings per share
from continuing
operations: -Basic 0.25 0.42 0.90 1.05
-Diluted 0.23 0.39 0.83 0.99

Net earnings per share
from discontinued
operations: -Basic - - - 0.13
-Diluted - - - 0.12

Net earnings per
share: -Basic 0.25 0.42 0.90 1.18
-Diluted 0.23 0.39 0.83 1.11
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Basic weighted average
number of outstanding
shares (in thousands) 19,394 17,819 18,245 15,997
Diluted weighted average
number of outstanding
shares (in thousands) 21,386 18,951 19,773 16,913
-------------------------------------------------------------------------
-------------------------------------------------------------------------


-------------------------------------------------------------------------
Miranda Technologies Inc.
Consolidated Balance Sheet
(in thousands of Canadian dollars)
December December
31, 2005 31, 2004
unaudited unaudited
-------------------------------------------------------------------------

Current assets:
Cash and cash equivalents 58,664 13,615
Accounts receivable 17,201 10,672
Inventories 9,281 6,691
Income taxes receivable 3,287 -
Prepaid expenses 805 541
Future income taxes 1,519 370
-------------------------------------------------------------------------
90,757 31,889

Capital assets 12,139 11,512
Intellectual property 612 2,449
Investment - 200
Future income taxes 4,643 4,917
-------------------------------------------------------------------------
108,151 50,967
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Liabilities and Shareholders'Equity
Current liabilities:
Accounts payable and accrued charges 16,006 14,104
Deferred revenue 2,182 -
Income taxes payable 1,845 1,687
Future income taxes 814 -
Current portion of long-term debt - 3,439
-------------------------------------------------------------------------
-------------------------------------------------------------------------
20,847 19,230

Deferred revenue 590 -

Future income taxes 2,148 735

Long-term debt - 10,603

Shareholders' equity:
Share capital 107,611 59,062
Contributed surplus 531 199
Deficit (23,576) (38,862)
-------------------------------------------------------------------------
84,566 20,399
-------------------------------------------------------------------------
-------------------------------------------------------------------------
108,151 50,967
-------------------------------------------------------------------------
-------------------------------------------------------------------------


-------------------------------------------------------------------------
Miranda Technologies Inc.
Consolidated statements of cash flows
(in thousands of Canadian dollars)

Quarter ended Year ended
December December December December
31, 2005 31, 2004 31, 2005 31, 2004
----- unaudited ------ ----- unaudited ------
-------------------------------------------------------------------------

Cash flows from operating
activities:
Net earnings 4,916 7,417 16,357 18,826

Ajustments for :
Capitalized interest
on long-term debt (2) 49 21 417
Depreciation of
capital assets 458 390 1,594 1,497
Write-off and impairment
of investment - 200 - 200
Amortization of intangible
assets 460 459 1,837 1,836
Stock-based compensation 117 114 457 153
Gain on forgiveness of debt - - - (1,664)
Future income taxes 1,413 (4,552) 2,873 (4,552)
Net income from discontinued
operations - - - (2,046)
Unrealized loss on foreign
exchange - (73) 36 20
Effect of exchange rates
on cash and cash
equivalents 586 (380) 1,180 (327)
-------------------------------------------------------------------------
7,948 3,624 24,355 14,360
Net change in operating
working capital items (173) 1,904 (7,838) (355)
-------------------------------------------------------------------------
7,775 5,528 16,517 14,005
Cash flows from discontinued
operations - - - 1,526
-------------------------------------------------------------------------
7,775 5,528 16,517 15,531

Cash flows from financing
activities:
Increase in long-term debt - - - 4,000
Repayment of long-term debt (7,822) (1,522) (12,291) (6,212)
Net decrease in bank loan - - - (2,320)
Issuance of share capital 50,000 - 50,000 -
Share issuance costs (4,905) - (4,905) -
Redemption of warrants (1,071) - (1,071) -
-------------------------------------------------------------------------
36,202 (1,522) 31,733 (4,532)

Cash flows from investing
activities:
Decrease in investment - - 200 -
Additions to capital assets (1,213) (576) (2,221) (1,464)
Proceeds from disposal of
discontinued operations - - - 2,340
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(1,213) (576) (2,021) 876
Effect of exchange rates on
cash and cash equivalents (586) 380 (1,180) 327
-------------------------------------------------------------------------

Net increase in cash and
cash equivalents 42,178 3,810 45,049 12,202

Cash and cash equivalents,
beginning of period 16,486 9,805 13,615 1,413
-------------------------------------------------------------------------

Cash and cash equivalents,
end of period 58,664 13,615 58,664 13,615
-------------------------------------------------------------------------
-------------------------------------------------------------------------


-------------------------------------------------------------------------
Miranda Technologies Inc.
Segmented information
(in thousands of Canadian dollars)

Quarter ended Year ended
December December December December
31, 2005 31, 2004 31, 2005 31, 2004
----- unaudited ------ ----- unaudited ------
-------------------------------------------------------------------------

Sales
America 15,289 12,570 58,456 41,204
Europe, Middle East,
Africa ("EMEA") 7,611 5,731 25,911 22,191
Asia 4,428 2,431 12,136 10,212
-------------------------------------------------------------------------
27,328 20,732 96,503 73,607
-------------------------------------------------------------------------

Contact Information

  • Investors: René Vachon, Executive Vice
    President & CFO, Miranda Technologies Inc., (514) 333-1772; Media:
    Jean Walter, Vice President, MaisonBrison/BarnesMcInerney, Capital Market
    Communications, (514) 731-0000; Source: Miranda Technologies Inc.