Yukon Metals Corp press release
Miranda reports first quarter results
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MONTREAL, May 10 /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 fiscal year 2006, ended March 31.
Highlights << At $24.1 million, sales increased 37% year-over-year for the quarter Adjusted EBITDA(1) reached $5.0 million at 21% of sales Net earnings were $3.4 million, an increase of 77% year-over-year Fully diluted net earnings per share stood at $0.14 versus $0.10 in Q1-2005
In the first quarter, which is historically a seasonally slower quarter for the Company, sales were $24.1 million, an increase of $6.5 million or 37% over the same period last year. This rise in sales, which surpassed the 32% year-over-year growth rate registered in the last quarter of 2005, continues to be the result of the increasing adoption of the Company's products and solutions. The accelerating transition to HDTV (High Definition Television), the greater penetration of the US market and the success met by Miranda's infrastructure products all contributed to the growth. Sales increased in all regions, but were particularly successful in Europe and Asia where the year-over-year growth rate was 48% and 89% respectively. Net earnings were $3.4 million compared with $1.9 million in the corresponding period in 2005. Earnings per share (EPS) on a fully diluted basis were $0.14 compared with $0.10 in the same period in 2005. Adjusted EBITDA, which the Company considers to be an appropriate measure of its performance, also increased during the quarter.
Reconciliation of net income to Adjusted EBITDA
Three Months Ended March 31 (In thousands of Canadian dollars) 2006 2005
Net income 3,398 1,920 Interest (445) 158 Taxes 1,483 953 Depreciation 401 372 Amortization of intangible assets 459 459 EBITDA before undernoted items 5,296 3,862 Previous years' investment tax credit recorded in period - (1,000) Other non recurring items (300) - Adjusted EBITDA 4,996 2,862 >>
Adjusted EBITDA was $5.0 million in the quarter compared with $2.9 million in the first quarter of 2005, an increase of 75%. The Adjusted EBITDA margin, expressed as a percentage of sales, grew to 21% in the first quarter against 16% in the first quarter of the previous year. This growth was achieved through growth in sales and control of operating expenses. Selling, general and administrative expenses increased by $1.5 million or 26% in the first quarter of 2006 compared with the corresponding quarter in 2005 due to sales growth and the recording of expenses related to operating as a public company. Research and development expenses increased by $0.7 million or 26% year-over-year. Net earnings were also positively impacted by a $0.4 million net interest income in the quarter versus a $0.2 million net interest expense recorded in the first quarter of 2005. This change is attributable to the company debt repayment at the end of 2005 and the accumulation of interest on cash balances in the first quarter of 2006. Finally, a $0.4 million foreign exchange gain recorded in the first quarter of 2006, versus a foreign exchange loss of $0.3 million in the previous year's first quarter, also contributed to the positive year-over-year comparison. "We are pleased with the results of the first quarter; a period of the year where our market is characteristically quieter. Overall, we have continued to see a growing demand for "HD-ready" products across all our ranges, and from an increasingly diverse base of customers," said Mr. Strath Goodship, Miranda's President and Chief Executive Officer. "We are also encouraged by the buoyancy of Asian and European business, particularly in some of our newer markets such as China and the Middle East," added Mr. Goodship. "Innovation is at the centre of our success and we have accelerated our investment in R&D. We have announced several innovative products at the National Association of Broadcasters convention in April, as well as a strategic acquisition, that will further our competitive position in each of our product segments.", he concluded. As mentioned, growth was achieved in all territories served by the Company. Sales increases in the quarter reached 49% when adjusted for the exchange rate variation. This variation was due to the strengthening of the Canadian dollar against the US dollar, the Euro, the British pound and the Yen, currencies that have declined versus the Canadian dollar in the first quarter. The variation in the exchange rate negatively impacted Miranda's sales by $2.0 million in the first quarter 2006. The quarter also produced positive cash flows. The Company generated $4.2 million from operating activities compared with a $1.3 million use of cash in the corresponding period in 2005. At the end of the first quarter 2006, the Company's cash position stood at $62.3 million, representing a $3.6 million increase over the year-end 2005 level. Following the end of the quarter, on April 22, Miranda announced the acquisition of VertigoXmedia, a privately held, MontrDeal-based manufacturer of high-end graphics automation software and systems, for an approximate price of Cdn$11 million, subject to closing conditions. Those conditions were met and the transaction was completed on May 2. This acquisition complements and strengthens Miranda's already successful suite of playout branding products and reinforces its competitive edge in the midst of the current large-scale high definition (HD) upgrade taking place in the broadcast industry worldwide.
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 conditional or future tense. By their very nature, such statements involve risks and uncertainty. Consequently, results could differ materially from the Company's expectations. For detailed information with respect to risk factors affecting Miranda's business, please refer to our annual information form under the heading "Risk Factors", which is available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release represent our current expectations and, accordingly, are subject to change. However, we disclaim any intention and assume no obligation to update or revise any forward-looking statements, whether as a result of new information or events or otherwise.
Conference Call
Miranda Technologies Inc. will hold a conference call with financial analysts to present its first quarter 2006 results today at 2:00 p.m. (Eastern Time). Those interested should call (514) 940-2795 (MontrDeal or overseas) or 1 800 814-4862 (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. Those unable to participate can hear a recording of the call by dialing 1 877 289-8525 and entering the code 21180961(pound key) on the telephone keypad. This recording will be accessible from 5:00 p.m. on Wednesday, May 10, 2006 until 11:59 p.m. on Wednesday, May 17, 2006. The webcast of the conference call will also be available during a period of 60 days at www.miranda.com, www.newswire.ca and www.q1234.com.
Annual Meeting of Shareholders
Miranda will hold its first Annual Meeting of Shareholders since becoming a public company, this morning at 10:00 a.m., in the Oval Ballroom of the Ritz-Carlton Hotel, 1228 Sherbrooke Street West, MontrDeal.
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 the more efficient distribution and management of content as well as the automation of previously manual processes. Miranda employs over 400 people at its MontrDeal headquarters and in its offices located in Wallingford (UK), Paris (France), Tokyo (Japan), Hong Kong, Beijing (China) and Springfield (New Jersey). 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, 2006 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 our interim unaudited consolidated financial statements and notes related thereto which have been filed on SEDAR.
(1) The Company uses Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) to compare performance from one period to another. In doing so, it excludes certain items (interest, taxes, depreciation and amortization) as well as restructuring and other non-recurring items which it views as outside its core operating results. Adjusted EBITDA is not an earnings measure recognized by Canadian generally accepted accounting principles (GAAP) and does not have a standardized meaning prescribed by GAAP. Our method of calculating Adjusted EBITDA may differ from the method used by other issuers and, accordingly, our Adjusted EBITDA may not be comparable to similarly titled measures used by other issuers. (See reconciliation of net income to Adjusted EBITDA below).
<< Consolidated Balance Sheets (In thousands of dollars)
March 31, December 31, 2006 2005 (Unaudited) (Audited) Assets
Current assets: Cash and cash equivalents $62,287 $58,664 Accounts receivable 13,905 17,201 Inventories 11,773 9,281 Income taxes receivable 3,840 3,287 Prepaid expenses 822 805 Future income taxes 1,365 1,519 93,992 90,757
Capital assets 12,492 12,139 Intellectual property 153 612 Future income taxes 2,928 4,643
$109,565 $108,151
Liabilities and Shareholders' Equity
Current liabilities: Accounts payable and accrued charges $14,527 $16,006 Deferred revenues 2,141 2,182 Income taxes payable 2,254 1,845 Future income taxes - 814 18,922 20,847
Deferred revenues 685 590 Future income taxes 1,909 2,148
Shareholders' equity: Share capital (note 2) 107,611 107,611 Contributed surplus (note 2) 616 531 Deficit (20,178) (23,576) 88,049 84,566
Contingencies (note 3) Subsequent event (note 5) $109,565 $108,151
See accompanying notes to unaudited consolidated financial statements.
Consolidated Statements of Income (Unaudited)
Three-month periods ended March 31, 2006 and 2005 (In thousands of dollars, except per share amounts)
2006 2005 Sales $24,101 $17,558
Cost of sales 9,741 6,602 14,360 10,956
Operating expenses: Selling, general and administrative 7,086 5,636 Research and development 3,567 2,842 Research and development tax credits (550) (1,375) Interest (445) 158 Foreign exchange (gain) loss (423) 297 Stock-based compensation 85 66 Amortization of intangible assets 459 459 9,779 8,083
Other revenue (300) -
Income before income taxes 4,881 2,873
Income taxes: Current 667 708 Future 816 245 1,483 953
Net income $ 3,398 $ 1,920
Net earnings per share (note 2 (c)): Basic $ 0.14 $ 0.11 Diluted 0.14 0.10
Basic weighted average number of shares outstanding 23,951,855 17,838,717 Diluted weighted average number of shares outstanding 25,051,052 19,100,886
See accompanying notes to unaudited consolidated financial statements.
Consolidated Statements of Deficit (Unaudited)
Three-month periods ended March 31, 2006 and 2005 (In thousands of dollars) 2006 2005
Deficit, beginning of year $(23,576) $(38,862)
Net income 3,398 1,920
Deficit, end of year $(20,178) $(36,942)
See accompanying notes to unaudited consolidated financial statements.
Consolidated Statements of Cash Flows (Unaudited)
Three-month periods ended March 31, 2006 and 2005 (In thousands of dollars) 2006 2005
Cash flows from operating activities: Net income $ 3,398 $ 1,920 Adjustments for: Capitalized interest on long-term debt - 23 Depreciation of capital assets 401 372 Amortization of intangible assets 459 459 Stock-based compensation 85 66 Gain on disposal of investment (100) - Future income taxes 816 245 Unrealized loss on foreign exchange - 9 Effect of exchange rates on cash and cash equivalents (89) (41) 4,970 3,053
Net change in operating working capital items (782) (4,385) 4,188 (1,332)
Cash flows from financing activities: Repayment of long-term debt - (950)
Cash flows from investing activities: Additions to capital assets (754) (397) Proceeds from sale of investment 100 - (654) (397)
Effect of exchange rates on cash and cash equivalents 89 41
Net increase (decrease) in cash and cash equivalents 3,623 (2,638)
Cash and cash equivalents, beginning of year 58,664 13,615
Cash and cash equivalents, end of year $62,287 $10,977
Cash and cash equivalents are comprised of: Cash $ 9,072 $ 2,306 Cash equivalents 53,215 8,671
$62,287 $10,977
See accompanying notes to unaudited consolidated financial statements.
Notes to Consolidated Financial Statements (Unaudited)
Three-month periods ended March 31, 2006 and 2005 (In thousands of dollars, except per share amounts)
Miranda Technologies Inc. (the "Company") was amalgamated under Part 1A of the Companies Act (QuDebec). 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. 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, 2005 audited consolidated financial statements and the notes thereto.
2. Share capital:
(a) Issued and paid share capital:
March 31, December 31, 2006 2005
23,951,855 common shares $107,611 $107,611
(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 approximately 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, 734,527 common shares are available for issuance under this stock option plan.
The following table summarizes information on stock options outstanding at March 31, 2006:
Weighted Number average of exercise options price
Balance, beginning of year 1,286,444 $ 2.37
Granted 374,000 16.54
Balance, end of year 1,660,444 $ 5.56
The outstanding options at March 31, 2006 are presented in the table below:
Number of Number of Residual outstanding vested life Exercise price options options (years)
$1.71 791,444 791,444 7.3 $1.71 120,000 120,000 8.3 $3.96 200,000 200,000 8.9 $3.96 175,000 175,000 9.2 $16.46 324,000 - 5.0 $17.08 50,000 - 5.0
1,660,444 1,286,444
Compensation cost charged against income was $85 for the period ended March 31, 2006 (2005 - $66). The offsetting credit has been recorded as contributed surplus.
The fair value of the stock options was estimated using the Black-Scholes option pricing model using the following assumptions:
2006 2005
Risk-free interest rate 3.25% 4.0% Dividend yield 0% 0% Expected life 5 years 5 years Expected volatility 31.31% 0% Weighted average fair value of each option at grant date $ 5.99 $ 0.71
(c) Earnings per share:
The following table provides the reconciliation between basic and diluted earnings per share:
2006 2005
Net income $ 3,398 $ 1,920
Weighted average number of common shares outstanding 23,951,855 17,838,717 Dilutive effect: Employees stock options 1,099,197 1,262,169 Weighted average number of diluted common shares outstanding 25,051,052 19,100,886
Basic earnings per share $ 0.14 $ 0.11
Diluted earnings per share $ 0.14 $ 0.10
3. Contingencies:
A complaint alleging patent infringement was filed in the United States against the Company on September 29, 2005. Based on the Company's review and the assessment of preliminary reports from its legal counsel in the United States, the Company believes that it has meritorious defenses to the complaint and intends to vigorously defend its case in court. Also, a number of legal proceedings against the Company are still outstanding. In the opinion of the management of the Company, the outcome of these proceedings is not expected to have a material effect on the Company's results or its financial position.
4. Segmented information:
The Company determined that it operates in a single reportable segment, the broadcast equipment segment, and it derives its revenues from the sale of hardware and software solutions including related services, training and commissioning.
March 31, March 31, Sales 2006 2005
America $12,606 $10,372 Europe, Middle East, Africa ("EMEA") 7,554 5,099 Asia 3,941 2,087
$24,101 $17,558
Capital assets and March 31, December 31, intellectual property 2006 2005
Capital Intellectual Capital Intellectual assets property assets property
America $11,610 $ - $11,442 $ - EMEA 816 153 672 612 Asia 66 - 25 -
$12,492 $ 153 $12,139 $ 612 Sales are attributed to the geographic locations based on the location of the customers.
5. Subsequent event:
On April 22, 2006, the Company announced the acquisition of VertigoXmedia for an approximate purchase price of $11 million in cash, subject to closing conditions. Those conditions were met and the transaction was completed on May 2, 2006. VertigoXmedia is a privately-held, MontrDeal-based manufacturer of high-end graphics automation software and systems and a recognized innovator in this field. The transaction will add a powerful suite of software workflow and graphics capabilities to the Company's existing playout branding products. %SEDAR: 00022869EF