Miranda Reports 2009 Financial Results

March 2, 2010

Source: Miranda

Miranda Technologies has reported results for the fourth quarter and fiscal year ended December 31, 2009.

Financial Tables

Highlights: 2009 versus 2008

Q4 2009 revenues up 9% to $35.7 million; Q4 net income was $2.1 million or 9 cents per fully diluted share, compared to $7.4 million and 31 cents respectively in 2008

Q4 2009 gross margin as a percentage of sales was 53%, down from 63% in 2008. Decline largely due to currency fluctuations, which negatively impacted gross margin by 7.1 percentage points

Fiscal year 2009 sales were $131.8 million compared to $130.0 in 2008 and net income was $5.5 million or 24 cents per fully diluted share, compared to $22.7 million and 92 cents respectively last year.

Fourth quarter revenues came in at $35.7 million, up 9% over 2008. Quarterly net income was $2.1 million or 9 cents per diluted share, compared to $7.4 million and 31 cents respectively last year.

The steps taken during the year to strengthen the business and mitigate the market downturn are working, with quarterly revenues and net income coming in at the highest levels for the year. As well, cash flows were strong with the Company generating $2.6 million of cash from operating activities and ending the quarter with cash, cash equivalents and temporary investments of over $49 million.

Sales for the year were $131.8 million driven by the NVISION acquisition and stronger International sales, largely offset by lower sales in North American where broadcast markets were hardest hit by the economic downturn. For the first time, International sales surpassed those to the United States, reflecting the benefits of having a global reach. International sales grew 16% over last year, coming in at $68.3 million, while sales to the United States were down 7% to $56.9 million.

EBITDA1 came in at 15.0 million, down from $34.8 million in 2008. Net income for the year was $5.5 million or 24 cents per diluted share, versus $22.7 million and 92 cents respectively in 2008. When excluding 2009 restructuring costs of $1.5 million and $0.9 million of one-time charges, net income for the year would have been $7.0 million, translating into fully diluted earnings per share (EPS) of 30 cents and adjusted EBITDA of $17.3 million.

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

Financial Tables

Operational Highlights

“It was a difficult year for broadcast markets, but we are now stronger financially, operationally and competitively,” said Mr Goodship, Miranda’s President and Chief Executive Officer. “Although markets were below historical levels, we have seen improvements in our sales volume as we strengthened our business over the course of the year. In particular, the successful integration of NVISION helped us to be more competitive by broadening our portfolio of solutions and allowing us to win a growing number of combined deals. We have seen sequential improvements in the revenue contribution of the NVISION line throughout the year.”

To mitigate the impact of the downturn, we took a series of measures to improve productivity which included workforce reductions and the consolidation of NVISION’s electronic assembly operations into our Montreal manufacturing facilities. This was made possible by our recent expansion of our Montreal headquarters. We now have the capacity and efficiency to deliver quality products even more rapidly.

We continued to invest in R&D to build our future and introduced a series of new award winning products, such as the Kaleido-X16 and the Kaleido-Modular. These products helped us win new customers in the USA, and internationally, and strengthened our position with some major accounts. With the recent rise of 3D TV, we demonstrated 3D enabled products, worked with a number of pioneering customers and actively participated on the standardisation of 3D for television.

Recently Miranda won a prize for best corporate governance among mid-sized companies in Quebec. Now in its eighth year, the award is sponsored by Korn Ferry, an international executive search firm, and Magazine Commerce. This year’s focus was on companies exhibiting good corporate governance practices in the area of executive remuneration.

Year-over-year quarterly operating highlights: Q4 2009 versus Q4 2008

Revenue

Revenues totalled $35.7 million for the quarter, up 9% over 2008, driven largely by the acquisition of NVISION.
Sales in Canada and the United States were down 70% and 4% respectively versus last year, while International markets continued to drive growth, increasing 28% over 2008. Canada, the United States and Other Countries generated 1%, 38% and 61% of quarterly sales respectively.

Gross Margin

Gross margin as a percentage of sales was 53% for the quarter, down from 63% last year. Compared to 2008, the quarterly margin was negatively impacted by 7.1 percentage points due to currency fluctuations. The remaining decrease was due to pricing, product and customer mix.

Operating Expenses

Selling, General & Administrative expenses (SG&A) were up 2% over 2008, to $10.4 million. The increase continued to be driven by the addition of NVISION’s operations, partially offset by lower provisions for incentive bonuses. SG&A as a percentage of sales was 29%, down from 31% last year.

Research and Development (R&D) investments increased slightly over 2008, coming in at $4.9 million, versus $4.6 million last year. R&D as a percentage of sales stood at 14%, unchanged from last year.

A foreign exchange loss of $0.5 million was recorded for the quarter, compared to a gain of $1.6 million in 2008. The loss largely reflects the impact of a stronger Canadian dollar in the translation of foreign currencies.

Net Income and EBITDA

Quarterly net income hit a high for the year, coming in at $2.1 million or 9 cents per fully diluted share. This compares to $7.4 million and 31 cents per share respectively in 2008.

EBITDA also came in at a quarterly high for the year, reaching $5.2 million or 15% of sales. This is down from $10.3 million and 31% of sales in 2008.

Liquidity and Capital Resources

Quarterly cash flows generated by operating activities were $2.6 million. As of December 31, 2009, cash, cash equivalents and temporary investments were $49.2 million, up from $48.4 million at the end of Q3 2009.

Financial Tables

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