New Found Gold Corp. press release
Miranda reports first-quarter results
TSX - Toronto Stock Exchange
MONTREAL, May 2 /CNW Telbec/ - 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 of its 2007 fiscal year, ended March 31.
In the first quarter of 2007, sales were $21.0 million, a decrease of 13% compared with the same period in 2006. Net income for the period was $0.9 million, compared to $3.4 million in the first quarter of 2006. This translates into a fully diluted EPS of $0.04, compared to $0.14 in 2006.
The decrease in sales was caused principally by a decline in the sales of the Kaleido-K2 multi-image processor and its impact on related products in Asia and in Europe.
Strath Goodship, President and CEO of Miranda said: "The new Kaleido-X multi-image processor is a robust platform with a number of unique features that have allowed us to win market share for larger monitor wall applications that the previous generation, Kaleido-K2, could not address. We have already installed the product for strategically significant accounts in the Americas and Europe and have seen positive customer response. However, the introduction of the Kaleido-X has negatively affected sales of the Kaleido-K2 more rapidly than anticipated and development will continue during the rest of 2007 to integrate all of the Kaleido-K2 functionalities into the new platform."
The decrease was also due to lower infrastructure equipment sales in Canada, which had been stronger in the first quarter of 2006, stimulated by intense HD conversion activity. On the other hand, sales in the United States rose by 19% during the first quarter of 2007 as a result of increased HD role-out activity.
Lower overall sales combined with higher operating expenses had a negative impact on profitability. EBITDA was $1.7 million, compared to $5.3 million in 2006. However, for a more accurate picture of operating performance, a few items should be highlighted: in the first quarter of 2007, legal fees of $0.5 million were incurred related to intellectual property litigation while last year's first-quarter results included an exchange gain of $0.4 million and a gain of $0.3 million from a settlement.
R&D investments for the quarter totalled $4.2 million, an increase of 17%. This intended increase in R&D activities allowed the Company to pursue its development plans to introduce new generation products and maintain its competitiveness. Several new products were launched at the National Broadcasters Association (NAB) show in April and the Company believes that these will have an impact on the 2007 performance as delivery of many of these products will begin in the third quarter. Some of the highlights are:
Kaleido-X version 1.1 software, with input signal alarm features; Imagestore 750 next generation HD/SD master control and branding platform; XVP-1801 / DAP-1701, a highly integrated and compact HD cross-converter and companion audio processing modules; Jazz-800 dual cross converter/standards converter in a single compact frame; Vertigo "automated promotion generation" workflow software tools; Three iControl software packages for set-top box, playout and remote station monitoring; 3Gb/s digital video fiber and electrical distribution amplifier.
In light of the positive reaction these products received at the show, efforts are being focused on the following key objectives. Mr. Goodship stated: "First, we intend to maximize our sales by accelerating the introduction of new products. This will be achieved by further streamlining product development and manufacturing processes, with the specific goal of substantially reducing time-to-market. We recently created the position of Senior Vice-President of Operations to help us reach this objective, and we now have Luc St-Georges on board to fill this position. Luc is an engineer and a seasoned executive with over twenty years of experience in high-end electronics manufacturing for well-established companies, such as Marconi and Positron Technologies. His mandate is to focus on reducing new product introduction time, and improving manufacturing output, efficiency and quality. Our second objective is to work on maximizing the impact of our new products by focusing on specific markets where customers are sensitive to our products' unique functionalities, as featured on the Kaleido-X. To that end, we have strengthened our sales team in Asia by adding a senior sales executive, Anita Man, whose extensive sales management experience was honed throughout the region with leaders such as Sony Corporation and Shure Incorporated. Third, we are putting ever more emphasis on customer support, as well as on the quality of our services, by increasing staff and training on complex products to satisfy customer response expectations." "Even though we are disappointed with our sales for the first quarter, we are very excited with the prospects for our new products that are to be delivered in the coming months. Our work on Kaleido-X is paying off and allowing us to reach into the large monitor wall market," added Mr. Goodship.
Forward-looking Statements
This press 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.
Conference call
Miranda Technologies Inc. will hold a conference call with financial analysts to present its first quarter 2007 results tomorrow at 2:00 PM (Eastern Time). Those interested should call 514-807-8791 (Montreal or overseas) or 800-732-9303 (elsewhere in North America). The call can also be accessed via a direct broadcast site at the following addresses: www.miranda.com, www.newswire.ca and www.q1234.com. The webcast of the conference call will be available for a period of 90 days. Those unable to participate can hear a recording of the call by dialling 1-877-289-8525 and entering the code 21226714(number sign) on the telephone keypad. This recording will be accessible from 5:00 PM on Thursday, May 3, 2007 to 11:59 PM on Thursday, May 10, 2007.
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 HDTV 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 over 400 people at its Montreal headquarters and in its facilities located in Wallingford (UK), Springfield (New Jersey, USA), Paris (France), Tokyo (Japan), Beijing (China) and Hong Kong. Miranda became a public company in December 2005 and 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 first quarter of the fiscal year ending December 31, 2007 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 interim unaudited consolidated financial statements and notes thereto, which have been filed on SEDAR.
CONSOLIDATED BALANCE SHEETS (In thousands of dollars)
March 31, 2007 and December 31, 2006
March 31, December 31, 2007 2006 (Unaudited) (Audited)
Assets
Current assets: Cash and cash equivalents $ 61,488 $ 40,378 Temporary investments - 22,179 Accounts receivable 14,011 17,710 Inventories 18,729 15,292 Income taxes receivable 5,076 5,279 Prepaid expenses 1,753 886 Future income taxes 619 625 101,676 102,349
Capital assets 13,818 13,498 Intangible assets 7,490 7,937 Goodwill 3,933 3,933
$ 126,917 $ 127,717
Liabilities and Shareholders' Equity
Current liabilities: Accounts payable and accrued charges $ 12,780 $ 14,649 Deferred revenue 213 298 Income taxes payable 772 1,015 13,765 15,962
Deferred revenue 1,235 1,040 Future income taxes 2,287 2,313
Shareholders' equity: Share capital (note 3) 111,841 111,784 Contributed surplus (note 3) 1,468 1,216 Deficit (3,663) (4,598) Accumulated other comprehensive income (notes 2 and 4) (16) - 109,630 108,402
Contingencies (note 5)
$ 126,917 $ 127,717
See accompanying notes to unaudited
CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Three-month periods ended March 31, 2007 and 2006 (In thousands of dollars, except per share amounts)
2007 2006
Sales $ 21,029 $ 24,101
Cost of sales 8,650 9,741 12,379 14,360
Operating expenses: Selling, general and administrative 7,905 6,786 Research and development 4,166 3,567 Research and development tax credits (999) (550) Interest (729) (445) Foreign exchange gain (100) (423) Stock-based compensation 252 85 Amortization of intangible assets 447 459 10,942 9,479
Income before income taxes 1,437 4,881
Income taxes: Current 584 667 Future (35) 816 549 1,483
Net income $ 888 $ 3,398
Net earnings per share (note 3 (c)): Basic $ 0.04 $ 0.14 Diluted 0.04 0.14
Basic weighted average number of shares outstanding 24,725,976 23,951,855 Diluted weighted average number of shares outstanding 25,119,436 25,051,052
See accompanying notes to unaudited consolidated financial statements.
CONSOLIDATED STATEMENTS OF DEFICIT (Unaudited)
Three-month periods ended March 31, 2007 and 2006 (In thousands of dollars)
2007 2006
Deficit, beginning of period $ (4,598) $ (23,576)
Adjustment due to the new accounting policies adopted regarding financial instruments (net of income taxes of $22) (note 2) 47 -
Adjusted balance (4,551) (23,576)
Net income 888 3,398
Deficit, end of period $ (3,663) $ (20,178)
Consolidated Statements of Comprehensive Income (Unaudited)
Three-month periods ended March 31, 2007 and 2006 (In thousands of dollars)
2007 2006
Net income $ 888 $ 3,398 Other comprehensive income: Change in fair value of available- for-sale financial assets (9) - Comprehensive income $ 879 $ 3,398
See accompanying notes to unaudited consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three-month periods ended March 31, 2007 and 2006 (In thousands of dollars)
2007 2006
Cash flows from operating activities: Net income $ 888 $ 3,398 Adjustments for: Depreciation of capital assets 505 401 Amortization of intangible assets 447 459 Stock-based compensation 252 85 Gain on disposal of investment - (100) Future income taxes (35) 816 Effect of exchange rates on cash and cash equivalents 81 (89) 2,138 4,970
Net change in non-cash balances related to operations (2,344) (782) (206) 4,188
Cash flows from financing activities: Issuance of share capital 57 -
Cash flows from investing activities: Additions to capital assets (825) (754) Proceeds from sale of investment - 100 Proceeds from sale of temporary investments 22,179 - 21,354 (654)
Effect of exchange rates on cash and cash equivalents (81) 89
Effect of comprehensive income on cash and cash equivalents (14) -
Net increase in cash and cash equivalents 21,110 3,623
Cash and cash equivalents, beginning of period 40,378 58,664
Cash and cash equivalents, end of period $ 61,488 $ 62,287
Cash and cash equivalents are comprised of: Cash $ 10,857 $ 9,072 Cash equivalents 50,631 53,215
$ 61,488 $ 62,287
See accompanying notes to unaudited consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Three-month periods ended March 31, 2007 and 2006 (In thousands of dollars, except per share amounts)
Miranda Technologies Inc. (the "Company") was amalgamated under Part 1A of the Companies Act (Quebec). The Company develops, manufactures and markets high performance solutions for the television broadcast industry.
1. Basis of presentation:
The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with Canadian generally accepted accounting principles on a basis consistent with those followed in the most recent audited annual consolidated financial statements, except for recognition and measurement of financial instruments presented per Section 3855 of CICA Handbook, Financial Instruments - Recognition and Measurement, which required prospective applications. These unaudited interim consolidated financial statements do not include all information and note disclosures required by Canadian generally accepted accounting principles for annual financial statements, and, therefore, should be read in conjunction with the December 31, 2006 audited consolidated financial statements and the notes thereto. Our sales are subject to seasonal fluctuation. Normally, the first quarter of each year is the weakest and sales activity is more evenly spread over the remaining quarters.
2. Changes in accounting policies:
Effective at the beginning of its 2007 fiscal year, the Company has adopted the Canadian Institute of Chartered Accountants ("CICA") Handbook Section 1530, Comprehensive Income, CICA Handbook Section 3251, Equity, CICA Handbook Section 3855, Financial Instruments -Recognition and Measurement, CICA Handbook Section 3861, Financial Instruments - Disclosure and Presentation, and CICA Handbook Section 3865, Hedges. These new Handbook Sections, which apply to fiscal years beginning on or after October 1, 2006, provide comprehensive requirements for the recognition and measurement of financial instruments, as well as standards on when and how hedge accounting may be applied. Handbook Section 1530 also establishes standards for reporting and displaying comprehensive income. Comprehensive income is defined as the change in equity from transactions and other events from non-owner sources. Other comprehensive income refers to items recognized in comprehensive income but that are excluded from net income calculated in accordance with generally accepted accounting principles. Under these new standards, all financial instruments are classified into one of the following five categories: held for trading, held-to-maturity investments, loans and receivables, available-for-sale financial assets or other financial liabilities. All financial instruments, including derivatives, are included on the consolidated balance sheet and are measured either at fair market value with the exception of loans and receivables, investments held-to-maturity and other financial liabilities, which will be measured at amortized cost. Subsequent measurement and recognition of changes in fair value of financial instruments depend on their initial classification. Held-for-trading financial investments are measured at fair value and all gains and losses are included in net income in the period in which they arise. Available-for-sale financial instruments are measured at fair value with revaluation gains and losses included in other comprehensive income until the asset is removed from the balance sheet. The standards require derivative instruments to be recorded as either assets or liabilities measured at their fair value unless exempted from derivative treatment as a normal purchase and sale. Certain derivatives embedded in other contracts must also be measured at fair value. All changes in the fair value of derivatives are recognized in earnings unless specific hedge criteria are met, which requires the Company to formally document, designate and assess the effectiveness of transactions that receive hedge accounting. Derivatives that qualify as hedging instruments must be designated as either a ''cash flow hedge,'' when the hedged item is a future cash flow, or a ''fair value hedge,'' when the hedged item is a recognized asset or liability. The unrealized gains and losses related to a cash flow hedge are included in other comprehensive income. For a fair value hedge, both the derivative and the hedged item are recorded at fair value in the consolidated balance sheet and the unrealized gains and losses from both items are included in earnings. Any derivative instrument that does not qualify for hedge accounting is marked-to-market at each reporting date and the gains or losses are included in earnings. These new standards have to be applied without restatement of prior period amounts. Upon initial application, all adjustments to the carrying amount of financial assets and liabilities shall be recognized as an adjustment to the opening balance of deficit or accumulated other comprehensive income, depending on the classification of existing assets or liabilities. As at January 1, 2007, the Company has recorded a $47 (net of income taxes of $22) reduction to the opening balance of deficit with respect to the financial assets and liabilities and embedded derivatives and a $7 (net of income taxes of $3) reduction to the opening balance of accumulated other comprehensive income with respect to the available-for-sale financial assets. As at December 31, 2006 and March 31, 2007, all outstanding forward foreign exchange contracts were reported on a mark-to-market basis and the gains or losses were included in earnings, because the Company elected not to follow hedge accounting for these derivatives. The adoption of these standards did not have a significant impact on the consolidated statement of income.
3. Share capital:
(a) Issued and paid share capital:
March 31, December 31, 2007 2006 24,740,197 common shares (24,706,813 at December 31, 2006) $ 111,841 $ 111,784
(b) Stock option plan:
The Company established a stock option plan to attract, retain and provide an incentive to the employees, directors, officers and consultants, by providing these persons with the opportunity, through stock options, to acquire an ownership interest in the Company. The current stock option plan was adopted in June 2003 to replace prior plans and has been amended and restated in November 2005 to conform to applicable securities rules and practices for public companies. The stock option plan is administered by the Board of Directors. The Board of Directors may determine, in accordance with the terms of the stock option plan, the terms relating to each option, including the number of shares subject to each option, exercise price and expiration date of each option and the extent to which each option is exercisable during the term of the option. The term of an option granted after November 2005 cannot exceed 5 years (10 years under the previous plan) and will usually be vested over three years. All of the options granted pursuant to the stock option plan before the November 2005 amendment have vested upon closing of the initial public offering of the Company. A total of 2,395,185 common shares are reserved for issuance upon exercise of options issued under the stock option plan. As a result, a total of less than 10% of the outstanding capital is reserved for issuance upon exercise of all options or issuable under the stock option plan. After taking into account issued and cancelled options, 527,991 common shares are available for issuance under this stock option plan.
The following table summarizes information on stock options outstanding at March 31, 2007: