Miranda Technologies Inc.
TSX : MT

Miranda Technologies Inc.

February 24, 2011 06:00 ET

Miranda Reports 2010 Fourth Quarter and Year-End Results

MONTREAL, QUEBEC--(Marketwire - Feb. 24, 2011) - Miranda Technologies Inc. (TSX:MT), a worldwide provider of infrastructure, playout and monitoring systems for the television broadcast, cable, satellite and IPTV industry, today reported results for the fourth quarter and fiscal year ended December 31, 2010.

Financial Highlights: 2010 versus 2009

  • Record revenues for both the quarter and year

  • Q4 2010 sales up 26% to $44.9 million; annual sales up 9% to $143.7 million

  • Organic growth of 16% for the quarter and 14% for the year on a constant dollar basis

  • Q4 2010 net income up 82% to $3.8 million; annual net income up 122% to $12.2 million

  • Q4 2010 and full year EBITDA(1) up 57% to $8.1 million and $23.6 million respectively

Fourth quarter revenues came in at $44.9 million, up 26% from $35.7 million in 2009. Quarterly net income increased to $3.8 million, up 82% from $2.1 million in the prior year. Fully diluted earnings per share rose to 17 cents, up from 9 cents in 2009. OmniBus, acquired on September 8, 2010, had quarterly revenues of $6.0 million, EBITDA of $0.6 million and an operating profit before amortization of intangible assets of $0.5 million. Excluding OmniBus, revenues grew 9% over last year or 16% on a constant dollar basis, while net income was up 92%.

For the full year sales were $143.7 million, up 9% from $131.8 million in 2009. Growth was driven by strong International sales, which were up 15% over 2009 to $78.3 million. Sales to the United States were down 3%, coming in at $55.5 million. EBITDA increased by 57% to $23.6 million. Net income was up 122% to $12.2 million or 54 cents per diluted share, versus $5.5 million and 24 cents respectively in 2009. Since being acquired, OmniBus has generated revenues of $7.9 million, EBITDA of $1.0 million and an operating profit before amortization of intangible assets of $0.8 million. Excluding OmniBus, 2010 revenues came in at $135.7 million, up 3% over 2009 or 14% on a constant dollar basis, while net income was up 122%.

"We delivered a strong close, with record revenues for both the quarter and year," commented Strath Goodship, Miranda's President and Chief Executive Officer. "The improvement in growth and operating results reflect the strategic product development, sales and acquisition initiatives that we have executed on over the past two years. Our recent moves into the fast growing IT-based playout and television service provider (TVSP) monitoring segments have strengthened our competitive position, and significantly expanded our addressable market. Momentum is clearly building in our sales funnel." Some of the notable recent sales wins include CBS (US), CNBC Europe, Comcast (US), CROATEL (Croatia), LIGA TV (Hungary), Scripps (US), Telemundo (US), TIBA (Argentina) and TV2 (Denmark).

(1) Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP financial measure. See comment on non-GAAP financial measures which follows.

Year-over-year quarterly operating review: Q4 2010 versus Q4 2009

Revenue

Revenues totalled $44.9 million for the quarter, up 26% over 2009. Excluding $6.0 million of revenues associated with OmniBus, quarterly revenues were $38.9 million, up 9% over last year or 16% on a constant currency basis.

Revenues increased in all geographies, with Canada, the United States and Other Countries, growing 596%, 24% and 14%, respectively over the prior year. Canada, the United States and Other Countries generated 7%, 38% and 55% of quarterly sales respectively.

Gross Margin

Gross margin as a percentage of sales was 60% for the quarter, up seven percentage points over 2009. Compared to last year, margins were positively impacted by pricing, product and customer mix, including the sale of higher margin solutions associated with OmniBus, along with operational efficiencies.

Operating Expenses

Selling, General & Administrative expenses (SG&A) were up 31% over 2009, to $13.7 million. The increase is largely due to the addition of OmniBus and higher provisions for incentive plans. SG&A as a percentage of sales was 31%, versus 29% in 2009.

Gross Research and Development (R&D) investments were $5.9 million for the quarter, up from $4.9 million last year, largely due the addition of OmniBus. Quarterly R&D as a percentage of sales was 13%, as compared to 14% in 2009.

Amortization of Intangible Assets totalled $1.8 million for the quarter, coming in $0.7 million higher than last year largely due to the addition of OmniBus. A foreign exchange loss of $0.9 million was recorded for the quarter, versus $0.5 million in 2009.

EBITDA, Income Taxes and Net Income

EBITDA was $8.1 million for the quarter, up 57% over 2009. EBITDA as a percentage of sales was 18%, increasing three percentage points over the 15% achieved in the prior year.

Quarterly net income grew 82% to $3.8 million or 17 cents per fully diluted share, compared to $2.1 million and 9 cents per share respectively in 2009. Excluding the impact of OmniBus, net income was up 92% over last year to $4.0 million. OmniBus recorded a net loss of $0.2 million for the period. Excluding amortization of intangible assets, OmniBus had an operating profit of $0.5M.

Liquidity and Capital Resources

Operating activities generated $5.2 million of cash flows during the quarter, compared to $2.6 million last year. Cash, cash equivalents and temporary investments were $35.5 million at quarter end, up from $32.0 million at the end of September 2010. During the quarter $0.9 million of long-term debt was repaid. In addition, the Company announced that its Board of Directors approved a new normal course issuer bid (NCIB) program, to purchase up to 1,694,937 or approximately 8% of the Company's issued and outstanding common shares for cancellation. The NCIB lasts for one year and ends on November 25, 2011 or on such earlier date as the Company has purchased the maximum shares permissible. To date, no shares have been purchased in connection with the NCIB.

Outlook

"Looking ahead, we continue to see growth coming from emerging markets and we are optimistic about the increasing momentum we are seeing in the US broadcast market," commented Mr. Goodship. "Our investment in product development and the IT-based playout segments expands our reach and heightens our growth outlook. Taken together, with a solid balance sheet, a strong global reach and a unique and timely set of technical solutions, we are positioned to outpace growth in our addressable markets and drive profitable results."

Conference call

Miranda Technologies Inc. (TSX: MT) will hold a conference call with financial analysts to present its 2010 fourth quarter and year end results on Thursday, February 24, 2011, at 9:00 a.m. (ET). Media and other interested parties are invited to join the conference call in listen- only mode.

DATE: Thursday, February 24, 2011
   
TIME: 9:00 a.m. Eastern Time
   
CALL: (416) 981-9000 (for all Toronto and overseas participants)
  (800) 909-4796 (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 11:00 a.m. on Thursday, February 24, 2011 to 11:59 PM on Thursday, March 3, 2011 and can be accessed by dialling 1-800-558-5253 and entering the pass code 21509735# 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 income to EBITDA in the following table.

Reconciliation of Net Income to EBITDA

($ thousands) Quarters ended Dec. 31   Years ended Dec. 31
  2010 2009   2010 2009
Net income 3,799 2,092   12,231 5,520
Interest expense (income) 185 (3 ) 145 438
Income taxes expense 1,249 1,012   2,197 1,164
Amortization of PPE* 1,122 1,024   3,900 3,592
Amortization of intangible assets 1,789 1,073   5,122 4,275
EBITDA 8,144 5,198   23,595 14,989
 
*PPE: Property, Plant and Equipment

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 Risks and Uncertainties in the Company's Annual Management's Discussion and Analysis, 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) is a worldwide provider of infrastructure, playout and monitoring systems for the broadcast and cable/satellite/IPTV industries. Its solutions enable and enhance the transition to a multi-channel digital and HD broadcast environment. With this equipment, customers can generate additional revenue while reducing their costs through more efficient distribution and management of their content. In September 2010, Miranda acquired OmniBus Systems Limited, the Loughborough UK-based pioneer of IT-based media management and delivery solutions for television and Internet broadcasters. Miranda employs approximately 660 people at its Montreal headquarters and in its facilities located in Wallingford and Loughborough (UK), Denver (Colorado, USA), Grass Valley (California, USA), Paris (France), Tokyo (Japan), Dubai (United Arab Emirates), Kuala Lumpur (Malaysia), Singapore, 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
(In thousands of Canadian dollars)
(Unaudited)
 
      December 31,     December 31,
      2010     2009
Assets          
 
Current assets:          
  Cash and cash equivalents $ 30,486   $ 29,264
  Temporary investments   4,999     19,904
  Accounts receivable   28,979     24,955
  Inventories   20,405     14,512
  Income taxes and tax credits receivable   5,200     5,808
  Prepaid expenses   1,953     1,552
  Future income taxes   1,416     979
      93,438     96,974
 
Tax credits receivable   9,350     1,870
Property, plant and equipment   32,617     30,725
Intangible assets   38,754     20,234
Goodwill   45,472     20,562
 
    $ 219,631   $ 170,365
 
Liabilities and Shareholders' Equity          
 
Current liabilities:          
  Accounts payable and accrued charges $ 24,438   $ 16,261
  Deferred revenue   5,934     2,327
  Income taxes payable   2,329     1,239
  Current portion of long-term debt   3,119     9
      35,820     19,836
 
Deferred revenue   3,590     3,601
Long-term debt   22,251     136
Future income taxes   16,516     10,489
 
Shareholders' equity:          
  Share capital   98,103     103,165
  Contributed surplus   4,707     4,491
  Retained earnings   40,301     28,647
  Accumulated other comprehensive loss   (1,657 )   -
      141,454     136,303
 
    $ 219,631   $ 170,365
 
 
 
MIRANDA TECHNOLOGIES INC.
Consolidated Statements of Income and Comprehensive Income
(In thousands of Canadian dollars, except per share and per share amounts)
(Unaudited)
 
    Three-month periods ended     Twelve-month periods ended  
    December 31,     December 31,  
    2010     2009     2010     2009  
   
Sales $ 44,885   $ 35,710   $ 143,673   $ 131,751  
Cost of sales   18,133     16,748     58,807     56,933  
    26,752     18,962     84,866     74,818  
   
Operating expenses:                        
  Selling, general and administrative   13,720     10,445     46,968     43,368  
  Research and development   5,860     4,854     23,228     21,799  
  Research and development tax credits   (1,277 )   (1,162 )   (8,124 )   (4,102 )
  Interest expense (income)   185     (3 )   145     438  
  Foreign exchange loss   925     471     2,366     1,329  
  Stock-based compensation   46     117     216     665  
  Other stock-based compensation   456     63     517     362  
  Amortization of intangible assets   1,789     1,073     5,122     4,275  
                         
    21,704     15,858     70,438     68,134  
Income before income taxes   5,048     3,104     14,428     6,684  
   
Income tax expenses (recovery):                        
  Current   1,928     52     2,813     1,122  
  Future   (679 )   960     (616 )   42  
    1,249     1,012     2,197     1,164  
   
Net income $ 3,799   $ 2,092   $ 12,231   $ 5,520  
   
Other comprehensive loss:                        
  Foreign exchange loss adjustment on translation of self-sustaining foreign operations   2,004     -     1,657     -  
   
Comprehensive income $ 1,795   $ 2,092   $ 10,574   $ 5,520  
   
Net earnings per share:                        
  Basic $ 0.17   $ 0.09   $ 0.55   $ 0.24  
  Diluted   0.17     0.09     0.54     0.24  
   
Basic weighted average number of shares outstanding   21,723,884     22,828,952     22,309,292     22,956,441  
Diluted weighted average number of shares outstanding   21,864,295     23,021,548     22,452,411     23,145,458  
 
 
 
MIRANDA TECHNOLOGIES INC.
Consolidated Statements of Cash Flows
(In thousands of Canadian dollars)
(Unaudited)
 
      Three-month periods ended     Twelve-month periods ended  
      December 31,     December 31,  
      2010     2009     2010     2009  
Cash flows from operating activities:                        
  Net income $ 3,799   $ 2,092   $ 12,231   $ 5,520  
  Adjustments for:                        
    Amortization of property, plant and equipment   1,122     1,024     3,900     3,592  
    Amortization of intangible assets   1,789     1,073     5,122     4,275  
    Stock-based compensation   46     117     216     665  
    Future income taxes   (679 )   960     (616 )   42  
    Change in fair value of financial instruments   -     2     -     -  
    Effect of exchange rates on long-term monetary assets and liabilities   (171 )   736     (83 )   (1,882 )
    Effect of exchange rates on cash and cash equivalents   1,137     281     1,357     1,636  
      7,043     6,285     22,127     13,848  
  Net change in non-cash balances related to operations   (1,846 )   (3,715 )   (7,067 )   (3,231 )
      5,197     2,570     15,060     10,617  
Cash flows from financing activities:                        
  Repayment of long-term debt   (919 )   (4 )   (937 )   (21,773 )
  Increase of long-term debt   12     -     25,012     -  
  Redemption of shares   -     -     (5,658 )   (3,390 )
  Issuance of share capital   2     34     19     34  
      (905 )   30     18,436     (25,129 )
Cash flows from investing activities:                        
  Net (increase) decrease in temporary investments   (9 )   (19,904 )   14,905     (17,857 )
  Business acquisition, excluding cash   1,300     -     (42,142 )   (64 )
  Restricted cash   -     -     -     25,000  
  Additions to property, plant and equipment   (669 )   (1,504 )   (3,381 )   (8,116 )
      622     (21,408 )   (30,618 )   (1,037 )
   
Effect of exchange rates on cash and cash equivalents   (1,137 )   (281 )   (1,357 )   (1,636 )
Effect of exchange rates on cash and cash equivalents related to translation of self-sustaining foreign operation (299 )   -     (299 )   -  
   
Net increase (decrease) in cash and cash equivalents   3,478     (19,089 )   1,222     (17,185 )
Cash and cash equivalents, beginning of period   27,008     48,353     29,264     46,449  
Cash and cash equivalents, end of period $ 30,486   $ 29,264   $ 30,486   $ 29,264  
   
Cash and cash equivalents are comprised of:                        
  Cash $ 30,486   $ 19,464   $ 30,486   $ 19,464  
  Cash equivalents   -     9,800     -     9,800  
    $ 30,486   $ 29,264   $ 30,486   $ 29,264  

Contact Information

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