Miranda Technologies Inc.
TSX : MT

Miranda Technologies Inc.

May 06, 2009 06:00 ET

Miranda Reports First Quarter 2009 Results

MONTREAL, QUEBEC--(Marketwire - May 6, 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 first quarter ended March 31, 2009.

First Quarter Highlights: Q1 2009/2008

- Sales of $33.2 million, up 30% from $25.5 million

- Net income of $1.1 million, down 69% from $3.5 million

- Fully diluted earnings per share (EPS) of 5 cents, down from 14 cents.

- EBITDA(1) of $3.8 million, down from $5.3 million

- Excluding charges related to the acquisition of NVISION, fully diluted EPS were 8 cents and EBITDA was $4.9 million

- New products and NVISION integration received positively at National Association of Broadcasters Show

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

"The integration of NVISION in our line-up and launch of our new products at the National Association of Broadcasters (NAB) show in April have heightened customer interest in Miranda and further improved our competitive position," said Strath Goodship, Miranda's President and Chief Executive Officer. "At NAB, we were able to demonstrate how quickly and innovatively we have integrated the NVISION routers and master control switchers with the rest of our product lines including graphics, modular interfaces, monitoring and control and multiviewers." Introductions at NAB included the Kaleido-X16, a compact, 3Gbps, feature rich, multi-viewer (which received two show awards), the addition of rich branding to the popular NV5100 master control switcher, a modular 3Gbps logo generator keyer, a 3Gbps cross-converter with advanced audio and control capabilities, and Xingest, a media ingest solution.

"First quarter revenues increased by 30%, fuelled by the acquisition of NVISION," commented Mr. Goodship. "Interest in our products remains robust, although the global recession caused lower sales volumes." This, along with higher selling, general & administrative expenses and special charges, resulted in a 69% decrease in net income to $1.1 million, or 5 cents per diluted share. Excluding special charges fully diluted earnings per share were 8 cents; a respectable performance in light of current economic conditions.

"We continue to have a strong balance sheet that should support us through the economic downturn and allow us to continue to invest in our business," highlighted Mr. Goodship. "However, as markets remain uncertain, we have accelerated the rationalization of our cost structure to preserve cash flows and the benefits of these initiatives will be seen in the next few quarters." These programs are expected to generate annualized savings in the order of $4 million.

Year-over-year operating highlights: Q1 2009 versus Q1 2008

Revenue

Revenues totalled $33.2 million for the first quarter, up 30% over 2008. Growth was largely driven by the sale of routers, associated with the acquisition of NVISION.

Sales in the United States and Other Countries were up 91% and 7% respectively, while sales in Canada were down $2.0 million or 60% versus last year. Sales in the United States improved considerably over levels seen in the fourth quarter 2008. Canada, the United States and Other Countries generated 4%, 56% and 40% of quarterly sales respectively.

Gross Margin

Gross margin as a percent of sales was up one point over last year, coming in at 59%. During the quarter gross margins were positively impacted by currency fluctuations. However, this was partially offset by special charges associated with the fair value adjustment to finished goods inventories, which increased the cost of sales on NVISION products sold during the quarter. Excluding these two elements, the gross margin would have been 58%, unchanged from 2008 levels.

Operating Expenses

Selling, General & Administrative expenses (SG&A) totalled $12.4 million for the quarter, up from $8.2 million in 2008. The increase largely reflects higher selling and administrative costs associated with the NVISION acquisition. SG&A as a percentage of revenue was 37% for the quarter, increasing 5 points over last year.

Research and Development (R&D) investments were up $1.7 million for the quarter, to $6.0 million, in line with a higher revenue base. R&D as a percentage of sales was 18%, up slightly from the 17% seen last year. This level of investment allows the Company to maintain its technological leadership and improve the speed of new product introductions. Going forward the Company intends to continue to focus on innovation, thus ensuring it emerges in an even stronger position as business conditions improve.

A foreign exchange gain of $0.6 million was recorded for the quarter, versus a $1.8 million gain for the same period in 2008.

Net Income and EBITDA

Net income for the quarter was $1.1 million, down from $3.5 million last year. Fully diluted earnings per share (EPS) were 5 cents, compared to 14 cents in 2008. Excluding special charges, fully diluted EPS were 8 cents.

EBITDA decreased by 27% to $3.8 million, down from $5.3 million in 2008. EBITDA as a percentage of sales was 12% for the quarter, versus 21% last year. Excluding special charges, EBITDA was $4.9 million.

Liquidity and Capital Resources

Quarterly cash flows from operating activities increased 125% over last year to $3.9 million, largely due to changes in non cash balances related to operations. As of March 31, 2009, cash, cash equivalents and temporary investments were $73.2 million.

During the quarter, the Company used $1.9 million to purchase 330,400 of its shares for cancelation under the normal course issuer bid (NCIB) program.

Outlook

"With the on-going global recession, it remains difficult to predict how broadcaster spending will continue to be impacted," commented Strath Goodship. "Although interest in our products remains high, order intake remains affected by weak economic conditions, which leads us to be cautious about growth expectations in the coming quarters. As such, we will continue to work on cost containment and preserving cash. At the same time, we will concentrate our sales efforts on more buoyant markets and continue to innovate and deliver value added products and services to our customers. The positive response received at the National Association of Broadcasters show highlights the success of Miranda's R&D program and confirms our position as one of the market leaders."

Miranda's Annual General Meeting will be held at 10:00 a.m. (local time) on Wednesday, May 6, 2009 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 2009 results on Wednesday, May 6, 2009, 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 6, 2009

TIME: 2:00 p.m. Eastern Time

CALL: (514) 807-8791 (for all Montreal and overseas participants)
(800) 590-1817 (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 6, 2009 to 11:59 PM on Wednesday, May 13, 2009 and can be accessed by dialling 1-877-289-8525and entering the pass code 21303936# 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.



Reconciliation of net income to EBITDA

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Quarters ended March 31,
(in thousands of Canadian dollars) 2009 2008
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Net income 1,087 3,456
Interest expense (income) 121 (669)
Income tax expense 653 1,504
Amortization of property, plant & equipment 862 543
Amortization of intangible assets 1,111 447
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EBITDA 3,834 5,281
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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), 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, 2009 and December 31, 2008
(In thousands of Canadian dollars)

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March 31, December 31,
2009 2008
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(Unaudited) (Audited)

Assets

Current assets:
Cash and cash equivalents $71,159 $46,449
Temporary investments 2,000 2,047
Accounts receivable 23,375 24,440
Inventories 21,495 23,798
Income taxes and tax credits receivable 5,124 3,810
Prepaid expenses 1,922 1,446
Future income taxes 1,967 1,967
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127,042 103,957

Restricted cash - 25,000
Tax credits receivable 1,041 1,098
Property, plant and equipment 25,714 25,432
Intangible assets 24,618 25,729
Goodwill 20,977 20,977

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$199,392 $202,193
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Liabilities and Shareholders' Equity

Current liabilities:
Accounts payable and accrued charges $17,827 $21,357
Deferred revenue 2,584 2,495
Income taxes payable 6,448 5,517
Current portion of long-term debt 24,480 2,932
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51,339 32,301

Deferred revenue 3,938 3,627
Long-term debt 172 21,608
Future income taxes 11,006 11,183

Shareholders' equity:
Share capital 104,396 105,883
Contributed surplus 4,116 3,826
Retained earnings 24,425 23,765
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132,937 133,474

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$199,392 $202,193
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MIRANDA TECHNOLOGIES INC.
Consolidated Statements of Income and Comprehensive Income
(Unaudited)

Three-month periods ended March 31, 2009 and 2008
(In thousands of Canadian dollars, except per share amounts)

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2009 2008
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Sales $33,210 $25,491

Cost of sales 13,574 10,738
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19,636 14,753

Operating expenses:
Selling, general and administrative 12,445 8,243
Research and development 6,043 4,305
Research and development tax credits (1,483) (1,100)
Interest expense (income) 121 (669)
Foreign exchange gain (631) (1,770)
Stock-based compensation 290 337
Amortization of intangible assets 1,111 447
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17,896 9,793

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Income before income taxes 1,740 4,960

Income taxes:
Current 830 1,394
Future (177) 110
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653 1,504

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Net income and comprehensive income $1,087 $3,456
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Net earnings per share:
Basic $0.05 $0.14
Diluted 0.05 0.14

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Basic weighted average number of shares
outstanding 23,296,089 24,804,720
Diluted weighted average number of shares
outstanding 23,561,347 25,101,258
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MIRANDA TECHNOLOGIES INC.
Consolidated Statements of Cash Flows
(Unaudited)

Three-month periods ended March 31, 2009 and 2008
(In thousands of Canadian dollars)

-------------------------------------------------------------------------
-------------------------------------------------------------------------
2009 2008
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Cash flows from operating activities:
Net income $1,087 $3,456
Adjustments for:
Amortization of property, plant and equipment 862 543
Amortization of intangible assets 1,111 447
Stock-based compensation 290 337
Future income taxes (177) 110
Effect of exchange rates on long-term debt 848 -
Effect of exchange rates on cash and cash
equivalents 442 (798)
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4,463 4,095

Net change in non-cash balances related to
operations (564) (2,361)
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3,899 1,734

Cash flows (used in) from financing activities:
Repayment of long-term debt (736) -
Redemption of shares (1,914) -
Issuance of share capital - 1
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(2,650) 1

Cash flows from (used in) investing activities:
Net decrease (increase) in temporary investments 47 (131)
Restricted cash 25,000 -
Additions to property, plant and equipment (1,144) (1,896)
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23,903 (2,027)

Effect of exchange rates on cash and cash
equivalents (442) 798

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Net (decrease) increase in cash and cash
equivalents 24,710 506

Cash and cash equivalents, beginning of period 46,449 47,146

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Cash and cash equivalents, end of period $71,159 $47,652
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Cash and cash equivalents are comprised of:
Cash $51,297 $27,051
Cash equivalents 19,862 20,601

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$71,159 $47,652
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Contact Information

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