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Miranda Reports Third Quarter 2011 Results: Revenue and Profitability at Highest Levels in Company History

(November 04, 2011)

MONTREAL, QUEBEC -- (Marketwire) -- 11/04/11 -- 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 third quarter ended September 30, 2011.

Financial Highlights: Q3 2011

-- Revenue up 29% to $48.8 million, growth realized across all geographies -- Gross profit as a percent of sales at 62% -- EBITDA(1) up 97% to $15.7 million or 32% of sales -- Net profit up 119% to $13.2 million or 60 cents per fully diluted share

Miranda achieved another quarter of strong results with revenue and profitability coming in at the highest levels in the Company's history. Revenue increased 29% over 2010 to $48.8 million, with solid growth registered across all geographies. On a constant currency basis sales volume was up 34%. Gross profit also showed continued strength coming in at 62%, while EBITDA was up 97% to $15.7 million or 32% of sales. Quarterly net profit was $13.2 million, translating into fully diluted earnings per share of 60 cents, up from 27 cents in the prior year. Fully diluted earnings per share would have been 47 cents for the current quarter, excluding a one-time $3.0 million income tax recovery adjustment. Cash generation was high, with operating activities generating $11.1 million of cash flows during the quarter.


"This marks the seventh consecutive quarter that the Company has registered year over year organic volume growth and gross margins in or above our targeted range," commented Strath Goodship, Miranda's President and Chief Executive Officer. "We are seeing solid traction in our business, reflecting our strong portfolio of leading edge solutions and our continuous focus on business execution."

"During the quarter, we announced major wins that llustratei our growing momentum and strength, including a multi-year, multi-million dollar routing solution contract with NBCUniversal and an agreement with ITV, the UK's largest commercial television network, to streamline its distribution chain using Miranda's iTX playout solution." Some of the other notable recent sales wins include Al Jazeera (UAE), Astro TV (Malaysia), BBC West One (UK), BskyB (UK), CBC (Canada), Center for Disease Control (USA), Da Ai TV (Taiwan), Lockheed-Martin (USA), Qatar TV (Qatar), TV Globo (Brazil), and Vive TV (Venezuela).

(1) EBITDA is an adjusted financial measure related to cash earnings and is defined as net profit before interest expense less interest income, taxes, depreciation and amortization. See comment on adjusted financial measures which follows.

Year-over-year quarterly operating review: Q3 2011 versus Q3 2010

Revenue

Quarterly revenue came in at $48.8 million, up 29% over last year, or 34% on a constant currency basis. Growth continued to be driven by the acquisition of OmniBus and higher revenue in all geographies. Quarterly sales in Canada, the United States, the United Kingdom and Other Countries increased 106%, 6%, 150% and 25% respectively over 2010.

Gross Profit

Gross profit as a percentage of sales was 62%, up from 58% last year. The increase over 2010 was driven by customer and product mix, including sales of higher margin IT-based playout solutions, along with favourable foreign exchange.

Operating Expenses

Selling, General & Administrative expenses (SG&A) were $15.3 million, compared to $12.7 million in 2010. The increase was largely due to the OmniBus acquisition and an increase in selling expenses. SG&A as a percentage of sales was 31%, down from 34% last year.

Research and Development (R&D) investments were $6.8 million for the quarter, unchanged from last year. R&D as a percentage of sales was 14% for the quarter, down from 18% in 2010.

Quarterly R&D expenses, net of tax credits, were $5.6 million or 12% of sales, up from $3.1 million and 8% respectively last year. The expense increase over 2010 is largely due to a $2.4 million favourable adjustment to R&D tax credits in the third quarter of 2010, relating to the resolution of previous years' matters. Excluding this adjustment, 2010 R&D expenses net of tax credits were $5.5 million.

Net finance income was $3.9 million for the quarter, compared to a finance expense of $0.5 million in 2010. The change from expense to income was largely due to favourable currency fluctuations in the current quarter, compared to last year and a decrease in the remeasurement of liabilities related to share-based payments.

EBITDA, Income Taxes and Net Profit

EBITDA was 97% over last year, coming in at $15.7 million for the quarter. EBITDA as a percentage of sales was 32%, up from 21% in 2010.

An income tax recovery of $0.1 million was recorded for the quarter, compared to $0.3 million last year. The tax recovery in both years was largely due to adjustments relating to the resolution of matters pertaining to prior years, resulting in an income tax recovery adjustment of $3.0 million in 2011 and $1.3 million in 2010.

Net profit was $13.2 million or 60 cents per fully diluted share, compared to $6.0 million and 27 cents respectively in 2010.

The 2011 fully diluted earnings per share would have been 47 cents, excluding the one-time 2011 favourable adjustment of $3.0 million to income taxes. The 2010 fully diluted earnings per share would have been 10 cents, excluding the one-time 2010 favourable adjustments of $2.4 million for R&D tax credits and $1.3 million for income taxes.

Liquidity and Capital Resources

Net operating activities generated $11.1 million of cash flows during the quarter, compared to $0.6 million last year. Cash, cash equivalents and temporary investments were $40.1 million at quarter end, up from $31.3 million at the end of the second quarter of 2011. During the quarter, $2.9 million was spent for additions to property plant and equipment, which included a new production line for the Company's Montreal facility and the relocation of the Company's European headquarters to Reading, UK. In addition $0.8 million of loans and borrowings were repaid.

Outlook

"Television markets have remained strong in severalparts of the world. We are seeing solid traction for our established products and growing interest for our new IT-based playout and monitoring platforms," highlighted Mr. Goodship. "We continue to be optimistic about the future and expect television markets to be underpinned by key events, such as the 2012 Olympics and US elections. With an expanding portfolio of innovative solutions and a strong balance sheet, we believe the Company is well positioned to deliver continued financial progress and outpace addressable market growth."

Due to continued business strength, the Company is revising its gross margin target to be within the 57% to 61% range. The Company is targeting annualized EBITDA of 20% to 25%.

Conference call

Miranda Technologies Inc. (TSX:MT) will hold a conference call with financial analysts to present its third quarter 2011 results on Friday November 4, 2011 at 9:00 AM (ET). Media and other interested parties are invited to join the conference call in listen-only mode.

DATE: Friday, November 4, 2011 TIME: 9:00 a.m. Eastern Time CALL: (416) 981-9000 (for all Toronto and overseas participants) (800) 954- 0626 (for all other North American callers) (Please dial in 15 minutes before the conference begins) WEBCAST: On line at http://www.miranda.com/ or http://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 AM on Friday, November 4, 2011 to 11:59 PM on Friday, November 11, 2011 and can be accessed by dialling 1-800-558-5253 and entering the pass code 21541956# on your telephone keyboard.

Adjusted Financial Measures

We use earnings before interest, taxes, depreciation and amortization ("EBITDA") to compare our operating results from one period to another. EBITDA is an adjusted financial measure related to cash earnings and is defined as net profit before interest expense less interest income, taxes, depreciation and amortization. Our method for calculating EBITDA may differ from that used by other companies under the same designation. EBITDA should not be substituted for net profit as an indicator of operating results in line with IFRS, neither for cash flows from operating and investing activities as a measure of liquidity and cash flows. Please refer to the reconciliation of net profit to EBITDA in the following table.

Reconciliation of Net Profit to EBITDA

Quarters ended September 30, ------------------------------ (in thousands of Canadian dollars) 2011 2010 --------------------------------------------------------------------------- Net profit 13,230 6,029 Interest expense 108 2 Income taxes recovery (102) (256) Depreciation of property, plant & equipment 1,071 983 Amortization of intangible assets 1,368 1,218 --------------------------------------------------------------------------- EBITDA 15,675 7,976 ---------------------------------------------------------------------------

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 is a leading worldwide provider of hardware and software solutions for the television broadcast, cable, satellite and IPTV industry. Its solutions span the full breadth of television operations, including production, playout, and delivery.

With a wealth of experience in delivering IT-based and traditional television systems, Miranda is uniquely positioned to help customers enhance their facilities, while generating additional revenue, reducing costs and streamlining operations.

For over 21 years, Miranda's growth has been driven by continuous innovation, along with close customer partnerships focused on helping them achieve their business objectives. To deliver this support, Miranda employs 690 people globally, in both developed and emerging markets. Miranda's head office is located in Montreal, and it has regional facilities in the United States, the United Kingdom, France, the United Arab Emirates, Japan, Malaysia, Singapore, Hong Kong and mainland China. A public company since December 2005, Miranda's shares (TSX:MT) are traded on the Toronto Stock Exchange. More information on the Company can be found at www.miranda.com.

MIRANDA TECHNOLOGIES INC. Condensed Consolidated Interim Statements of Financial Position (Unaudited) As at September 30, 2011, December 31, 2010 and January 1, 2010 (In thousands of Canadian dollars) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- September 30, December 31, January 1, 2011 2010 2010 ---------------------------------------------------------------------------- Assets Current assets Cash and cash equivalents $ 40,066 $ 30,486 $ 29,264 Temporary investments - 4,999 19,904 Trade and other receivables 37,049 29,546 25,601 Inventories 21,452 20,405 14,512 Income taxes and tax credits receivable 5,213 5,307 5,808 Prepaid expenses and other 2,036 2,066 1,650 ---------------------------------------------------------------------------- 105,816 92,809 96,739 Tax credits receivable 10,552 9,350 1,870 Property, plant and equipment 33,117 30,923 29,109 Intangible assets 35,931 39,429 20,960 Goodwill (note 8) 45,318 44,219 20,562 Deferred tax assets 418 579 485 ---------------------------------------------------------------------------- Total assets $ 231,152 $ 217,309 $ 169,725 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Liabilities and Equity Current liabilities Trade and other payables $ 22,807 $ 21,139 $ 13,505 Provisions 1,868 1,808 2,071 Deferred revenue 5,832 5,934 2,327 Income taxes payable 1,474 2,329 1,239 Loans and borrowings 3,000 3,119 9 ---------------------------------------------------------------------------- 34,981 34,329 19,151 Other payables 234 942 555 Provisions 1,569 964 933 Deferred revenue 3,254 3,590 3,601 Loans and borrowings 14,000 22,251 136 Deferred tax liabilities 13,951 13,772 8,124 ---------------------------------------------------------------------------- Total liabilities 67,989 75,848 32,500 ---------------------------------------------------------------------------- Equity Share capital 98,221 98,103 103,165 Contributed surplus 4,941 4,655 4,413 Retained earnings 59,408 40,324 29,647 Accumulated other comprehensive income (loss) 593 (1,621) - ---------------------------------------------------------------------------- Total equity 163,163 141,461 137,225 ---------------------------------------------------------------------------- Total liabilities and equity $ 231,152 $ 217,309 $ 169,725 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- MIRANDA TECHNOLOGIES INC. Condensed Consolidated Interim Statements of Comprehensive Income (Unaudited) Three-month and nine-month periods ended September 30, 2011 and 2010 (In thousands of Canadian dollars, except per share amounts) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Three-month periods Nine-month periods ended ended September 30, September 30, ------------------- ------------------- 2011 2010 2011 2010 ---------------------------------------------------------------------------- Revenue $ 48,815 $ 37,749 $ 131,793 $ 98,788 Cost of sales 18,584 15,708 51,922 40,632 ---------------------------------------------------------------------------- Gross profit 30,231 22,041 79,871 58,156 Selling, general and administrative expenses 15,336 12,662 45,509 36,047 Research and development expenses, net of tax credits of $1,202 and $3,923 (2010 - $3,720 and $6,847) 5,633 3,086 17,471 12,366 ---------------------------------------------------------------------------- Results from operating activities 9,262 6,293 16,891 9,743 ---------------------------------------------------------------------------- Finance income (4,017) (152) (4,913) (1,499) Finance costs 151 672 1,189 2,680 ---------------------------------------------------------------------------- Net finance (income) expense (3,866) 520 (3,724) 1,181 ---------------------------------------------------------------------------- Profit before income taxes 13,128 5,773 20,615 8,562 Income taxes (recovery) expense (102) (256) 1,531 640 ---------------------------------------------------------------------------- Net profit for the period 13,230 6,029 19,084 7,922 ---------------------------------------------------------------------------- Other comprehensive income: Foreign currency translation differences for foreign operations, net of taxes (2,338) (329) (2,214) (329) ---------------------------------------------------------------------------- Total comprehensive income for the period $ 15,568 $ 6,358 $ 21,298 $ 8,251 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Earnings per share: Basic $ 0.61 $ 0.27 $ 0.88 $ 0.35 Diluted 0.60 0.27 0.87 0.35 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- MIRANDA TECHNOLOGIES INC. Condensed Consolidated Interim Statements of Cash Flows (Unaudited) Three-month and nine-month periods ended September 30, 2011 and 2010 (In thousands of Canadian dollars) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Three-month periods Nine-month periods ended ended September 30, September 30, -------------------- -------------------- 2011 2010 2011 2010 ---------------------------------------------------------------------------- Operating activities: Net profit for the period $ 13,230 $ 6,029 $ 19,084 $ 7,922 Reconciliation of non-cash items: Depreciation of property, plant and equipment 1,071 983 2,949 2,859 Amortization of intangible assets 1,368 1,218 4,669 3,348 Stock-based compensation 108 40 286 181 Net interest expense (income) 108 2 403 (40) Income taxes (recovery) expense (102) (256) 1,531 640 Effect of exchange rates on long-term monetary assets and liabilities (449) 143 (264) 93 Effect of exchange rates on cash and cash equivalents (1,082) (10) (1,254) 108 ---------------------------------------------------------------------------- 14,252 8,149 27,404 15,111 Changes in non-cash operating working capital items: Trade and other receivables (6,256) (6,388) (7,339) (1,292) Inventories (393) (2,665) (1,044) (5,569) Income taxes and tax credits receivable (1,209) (3,105) (2,223) (5,901) Prepaid expenses and other (118) 312 38 588 Trade and other payables 4,110 3,238 842 4,106 Provisions 426 482 665 168 Deferred revenue 505 996 (325) 441 ---------------------------------------------------------------------------- Cash generated from operating activities 11,317 1,019 18,018 7,652 Income taxes paid (248) (447) (1,005) (692) ---------------------------------------------------------------------------- Net cash from operating activities 11,069 572 17,013 6,960 ---------------------------------------------------------------------------- Investing activities: Proceeds from sale of temporary investments - 14,991 4,999 14,915 Additions to property, plant and equipment (2,943) (587) (5,165) (2,712) Additions to intangible assets (100) - (137) - Business acquisition, excluding cash - (40,692) - (40,692) Interest received 50 57 93 99 ---------------------------------------------------------------------------- Net cash used in investing activities (2,993) (26,231) (210) (28,390) ---------------------------------------------------------------------------- Financing activities: Repayment of loans and borrowings (750) (15) (8,391) (18) Increase in loans and borrowings - 25,000 - 25,000 Proceeds from the exercise of share options 1 17 118 17 Redemption of shares - (3,069) - (5,658) Interest paid (158) (59) (496) (59) ---------------------------------------------------------------------------- Net cash (used in) from financing activities (907) 21,874 (8,769) 19,282 ---------------------------------------------------------------------------- Effect of exchange rates on cash and cash equivalents 1,082 10 1,254 (108) Effect of exchange rates on cash and cash equivalents related to translation of foreign operations 525 - 292 - ---------------------------------------------------------------------------- Change in cash and cash equivalents 8,776 (3,775) 9,580 (2,256) Cash and cash equivalents, beginning of period 31,290 30,783 30,486 29,264 ---------------------------------------------------------------------------- Cash and cash equivalents, end of period $ 40,066 $ 27,008 $ 40,066 $ 27,008 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------

Contacts:
Source:
Miranda Technologies Inc.

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


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