Miranda Technologies Inc.
TSX : MT

Miranda Technologies Inc.

February 19, 2009 16:01 ET

Miranda Reports 2008 Fourth Quarter and Year-End Results

MONTREAL, QUEBEC--(Marketwire - Feb. 19, 2009) - 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 fiscal year ended December 31, 2008.

Highlights: 2008 versus 2007

- Record revenue and profitability for the year

- Fourth quarter sales up 3%; annual sales up 16%

- Fourth quarter net income up 128%; full year 2008 up 140%

- Cash generation remains strong

Fourth quarter revenues grew by 3% over 2007 to $32.7M, topping off a strong year. Net income for the quarter reached $7.4 million, up 128% over 2007. Fully diluted earnings per share rose to 31 cents, up from 13 cents in 2007. Results for NVISION, which was acquired on December 22, 2008, were consolidated for the last ten days of 2008 inclusively. The impact of this on Miranda's performance was nominal.

For the full year, sales grew by 16% over 2007 to $130 million, while EBITDA(1) increased by 113% to $34.8 million. Net income was $22.7 million, up 140% from $9.5 million. On a fully diluted basis, 2008 earnings per share (EPS) were 92 cents, compared to 38 cents in the prior year.

"I am pleased with our financial performance and our accomplishments for the quarter and year, particularly given the global economic uncertainty," commented Strath Goodship, Miranda's President and Chief Executive Officer. "During 2008, Miranda reached several milestones, including record revenues and profitability. To cap things off, we successfully completed the acquisition of NVISION, further enhancing our technical expertise and product mix. With NVISION's routing systems, we can now offer facility-wide solutions and deliver strong integration across all of our product ranges. This will not only result in more streamlined hardware and lower costs, but enhance operator productivity through improved control systems. These investments improve our competitive stance and lay a solid base from which we will continue to offer our customers innovative solutions tailored to meet their broadcasting needs."

(1) Earnings before interest, taxes, depreciation and amortization (EBITDA) is a Non-GAAP measure. See the comment on Non-GAAP Financial Measures which follows.



Year-over-year quarterly operating highlights: Q4 2008 versus Q4 2007

Revenue

Quarterly sales increased by 3% to $32.7 million, driven largely by strength in international markets outside of North America.

Canada and the United States generated 5% and 43% of quarterly revenues respectively, while Other Countries generated 52%.

Sales in North America were down 8% over 2007, reflecting the global downturn and associated delays in broadcaster spending. Demand in international markets fared better than those in North America, with sales in Other Countries increasing 15% over last year.

Gross Margin

Quarterly gross margin as a percent of sales remained strong, increasing 7 percentage points over last year to 63%. The stronger margins continued to be driven by foreign exchange gains, operational and cost efficiencies, and a more favourable product mix.

Operating Expenses

Selling, General and Administrative expenses (SG&A) were $10.3 million for the quarter, up slightly from $10.1 million in 2007. The increase reflects higher selling, marketing, support and administrative costs. SG&A as a percent of revenue was 32% for the quarter, unchanged from 2007.

Research and Development (R&D) investments were $4.6 million for the quarter, versus $3.6 million in 2007. The increase reflects higher R&D investment activity. R&D as a percentage of sales was 14% for both the quarter and year, which was in line with the 14% seen in fiscal 2007.

R&D tax credits were $2.6 million in the quarter compared to $0.9 million last year. The increase reflects higher R&D spending and a $1.3 million recovery due to a change in estimates.

A foreign exchange gain of $1.6 million was recorded this quarter, compared to a loss of $0.2 million in 2007. The quarterly gain in 2008 was due to a strengthening of the US dollar over the Canadian dollar.

Net Income and EBITDA

Net income was $7.4 million for the quarter, up 128% over 2007. The increase was due to higher gross margins, foreign exchange gains and higher R&D tax credits This translated into fully diluted earnings per share (EPS) of 31 cents, up from 13 cents last year.

Quarterly EBITDA remained strong, coming in at $10.3 million, up 110% from 4.9M last year. At 31%, EBITDA as a percentage of sales also improved substantially over the 15% achieved in the fourth quarter of 2007.

Liquidity and Capital Resources

Quarterly cash flows from operating activities increased 177% over 2007 to $18.5 million, driven by higher net income. As of December 31, 2008, cash, cash equivalents, investments and restricted cash were $73.5 million, versus $75.0 million at the end the fourth quarter 2007. The 2008 balance includes $25.0 million of restricted cash, used as collateral against borrowings on a US credit facility related to the NVISION acquisition. During the quarter, the Company used $3.6 million to repurchase 526,900 of its shares under the normal course issuer bid (NCIB) program.

Shareholder Rights Plan

On February 19, 2009 Miranda entered into a shareholder rights plan agreement to encourage the fair treatment of shareholders in the event a take-over bid is made for Miranda.

The rights plan has not been adopted in response to any specific proposal to acquire control of Miranda, nor is Miranda aware of any such intention. The rights plan is conditional on regulatory approval and shareholder ratification at the annual and special meeting of shareholders, scheduled to be held on May 6, 2009.

Under the term of the plan, one right has been issued with respect to each of the common shares of Miranda issued and outstanding as of February 19, 2009. These rights will become exercisable only when a person, including any party related to it, acquires or attempts to acquire 20 percent or more of Miranda's outstanding Shares without complying with the "Permitted Bid" provisions of the Rights Plan or without approval of the Company's Board of Directors. Should such an acquisition occur or be announced, each right would, upon exercise, entitle a rights holder, other than the acquiring person and related persons, to purchase shares of Miranda at a 50 percent discount to the market price at the time. Under the Rights Plan, a Permitted Bid is a bid which is made to all holders of the shares and which is open for acceptance for not less than 60 days.

A material change report and a complete copy of the rights plan will be filed on SEDAR.

Outlook

"As we enter 2009, we have one of the strongest product offerings in the broadcast industry and enjoy leadership positions in some of the most evolving broadcast segments," commented Mr. Goodship. "Furthermore, we have a diversified business, both geographically and in terms of products, and have a sound balance sheet. That being said, we are faced with a global economic slowdown that is affecting almost every industry, including ours and it is difficult to predict the degree to which our customers' spending will be impacted in 2009. In response to this, we intend to take the necessary steps to control costs and preserve cash flows as market conditions evolve."

"Innovation is critical to maintaining our value to our customers. Therefore, we remain committed to R&D and will pursue additional strategic growth opportunities, while focusing on strong execution. By increasing productivity and investing in our future, we should be well positioned when market conditions improve."

Conference call

Miranda Technologies Inc. (TSX:MT) will hold a conference call with financial analysts to present its 2008 fourth quarter and year-end results on Thursday, February 19, 2009, at 5:00 p.m. (ET). Media and other interested parties are invited to join the conference call in listen-only mode.



DATE: Thursday, February 19, 2009

TIME: 5:00 p.m. Eastern Time

CALL: (514) 807-8791 (for all Montreal and overseas participants)
(800) 731-5774 (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 7:00 p.m. on Thursday, February 19, 2009 to 11:59 PM on Thursday, February 26, 2009 and can be accessed by dialling 1-877-289-8525and entering the pass code 21297242# 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. The financial indicator that conforms with GAAP and is the closest to EBITDA is net income. Please refer to the reconciliation of net income to EBITDA in the following table.



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Quarters ended Dec. 31 Years ended
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($ thousands) 2008 2007 2008 2007
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Net income 7,418 3,255 22,737 9,481
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Interest revenue (576) (702) (2,426) (2,658)
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Income taxes 2,141 1,376 10,160 5,603
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Depreciation 704 513 2,427 2,105
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Amortization of intangible assets 584 447 1,926 1,788
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EBITDA 10,271 4,889 34,824 16,319
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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 600 people at its Montreal headquarters and in its facilities located in Wallingford (UK), Grass Valley (California, USA), Springfield (New Jersey, USA), Paris (France), Tokyo (Japan), Beijing (China), Dubai (United Arab Emirates) and Hong Kong. Miranda is listed on the Toronto Stock Exchange. For more information, please visit www.miranda.com.

The selected consolidated financial information set out below for the fourth quarter of the fiscal year ending December 31, 2008 is unaudited, presented in Canadian dollars and prepared in accordance with Canadian generally accepted accounting principles. The following information should be read in conjunction with the Company's consolidated financial statements and notes thereto, which will be filed on SEDAR.




MIRANDA TECHNOLOGIES INC.
Consolidated Balance Sheets
(In thousands of Canadian dollars)
(Unaudited)

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December 31,
2008 2007
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Assets

Current assets:
Cash and cash equivalents $46,449 $47,146
Temporary investments 2,047 27,890
Accounts receivable 24,440 22,442
Inventories 23,798 14,580
Income taxes and tax credits receivable 3,810 4,006
Prepaid expenses 1,446 807
Future income taxes 1,967 -
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103,957 116,871

Restricted cash 25,000 -
Tax credits receivable 1,098 449
Property, plant and equipment 25,432 13,656
Intangible assets 25,729 6,186
Goodwill 20,977 3,933

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$202,193 $141,095
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Liabilities and Shareholders' Equity

Current liabilities:
Accounts payable and accrued charges $21,357 $13,644
Deferred revenue 2,495 1,958
Income taxes payable 5,517 740
Long-term debt 2,932 -
Future income taxes - 2,738
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32,301 19,080

Deferred revenue 3,627 2,055
Long-term debt 21,608 -
Future income taxes 11,183 477

Shareholders' equity:
Share capital 105,883 112,088
Contributed surplus 3,826 2,465
Retained earnings 23,765 4,930
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133,474 119,483

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$202,193 $141,095
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MIRANDA TECHNOLOGIES INC.
Consolidated Statements of Income
(In thousands of Canadian dollars, except per share amounts)
(Unaudited)

--------------------------------------------------------------------------
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Three-month periods Twelve-month periods
ended December 31, ended December 31,
--------------------------------------------------------------------------
2008 2007 2008 2007
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Sales $32,655 $31,702 $129,961 $112,219
Cost of sales 12,033 13,953 51,152 48,876
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20,622 17,749 78,809 63,343

Operating expenses:
Selling, general and
administrative 10,292 10,065 37,001 34,408
Research and development 4,621 3,606 17,758 15,624
Research and development
tax credits (2,571) (894) (5,812) (3,720)
Interest income (576) (702) (2,426) (2,658)
Foreign exchange
(gain) loss (1,626) 221 (3,896) 1,568
Stock-based compensation 339 375 1,361 1,249
Amortization of
intangible assets 584 447 1,926 1,788
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11,063 13,118 45,912 48,259
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Income before income taxes 9,559 4,631 32,897 15,084

Income taxes:
Current 3,298 (798) 10,730 3,700
Future (1,157) 2,174 (570) 1,903
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2,141 1,376 10,160 5,603
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Net income $7,418 $3,255 $22,737 $9,481
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Net earnings per share
Basic $0.31 $0.13 $0.93 $0.38
Diluted 0.31 0.13 0.92 0.38
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Basic weighted
average number of
shares outstanding 23,659,341 24,776,157 24,369,312 24,746,867
Diluted weighted
average number of
shares outstanding 23,910,710 25,117,690 24,632,982 25,101,422
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MIRANDA TECHNOLOGIES INC.
Consolidated Statements of Cash Flows
(In thousands of Canadian dollars)
(Unaudited)

--------------------------------------------------------------------------
--------------------------------------------------------------------------
Three-month periods Twelve-month periods
ended December 31, ended December 31,
--------------------------------------------------------------------------
2008 2007 2008 2007
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Cash flows from
operating activities:
Net income $7,418 $3,255 $22,737 $9,481
Adjustments for:
Amortization of property,
plant and equipment 704 513 2,427 2,105
Amortization of
intangible assets 584 447 1,926 1,788
Stock-based compensation 339 375 1,361 1,249
Future income taxes (1,157) 2,174 (570) 1,903
Effect of exchange
rates on cash and
cash equivalents 1,256 401 1,213 3,004
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9,144 7,165 29,094 19,530
Net change in
non-cash balances
related to operations 9,340 (499) 10,070 (1,751)
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18,484 6,666 39,164 17,779
Cash flows from
financing activities:
Increase in long-term debt 24,363 - 24,363 -
Redemption of shares (3,639) - (10,152) -
Issuance of common shares - 241 45 304
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20,724 241 14,256 304
Cash flows used in
investing activities:
Net (additions)
proceeds from sale of
temporary investments (15) - 25,843 -
Additions to temporary
investments - (27,890) - (5,711)
Business acquisition,
excluding cash (49,199) - (49,199) -
Restricted cash (25,000) - (25,000) -
Additions to property,
plant and equipment (1,439) (516) (4,548) (2,263)
Additions to other assets - (300) - (337)
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(75,653) (28,706) (52,904) (8,311)
Effect of
exchange rates
on cash and
cash equivalents (1,256) (401) (1,213) (3,004)
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Net (decrease)
increase in cash
and cash equivalents (37,701) (22,200) (697) 6,768
Cash and cash equivalents,
beginning of period 84,150 69,346 47,146 40,378
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Cash and cash equivalents,
end of period $46,449 $47,146 $46,449 $47,146
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Cash and cash equivalents
are comprised of:
Cash $26,622 $26,835 $26,622 $26,835
Cash equivalents 19,827 20,311 19,827 20,311
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$46,449 $47,146 $46,449 $47,146
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Contact Information

  • Investors and Media:
    Miranda Technologies Inc.
    Mario Settino
    Chief Financial Officer
    514-333-1772