Miranda Technologies announced that its revenue for the first quarter of 2012 was C$42.2m, an increase of 7% versus the same period last year, and down 16% versus the previous quarter.
On the company’s conference call, Miranda CEO Strath Goodship says the company continues to work toward its 11% annual growth target, and believe that this is achievable for the full year 2012.
The company declined to break out revenue from OmniBus for competitive reasons, but said it was “very encouraged” with the way the OmniBus business was going and the way the industry is developing towards integrated playout solutions.
Net profit for the quarter was C$928,000, down from C$2.3m last year, and down from $3.2m versus the previous quarter. Adjusted net profit for the quarter was C$3.2m, up 65% versus the same period a year ago.
The company said its Q1 2012 results were driven by stronger sales in most geographies, with the USA, United Kingdom and other countries increasing 8%, 64% and 3% respectively. Sales in Canada were down 40% versus last year due to a large order in Q1 2011 that was not repeated this year.
Goodship cautioned that the strong increase in the UK number was not reflective of the local market because it is a distribution point for the rest of Europe and the Middle East.
EBITDA was C$3.9m for the quarter, down 29% versus Q1 2011, and down 55% versus quarter. Adjusted EBITDA (which excludes share-based compensation costs, currency fluctuations, and other items) for the quarter was $6.8m, up 17% versus last year.
EBITDA as a percentage of sales was 9%, down from 14% last year, and down from 17% last quarter. Adjusted EBITDA was up 17% over 2011 to $6.8 million, representing 16% of sales. The company’s annualized EBITDA target range is 20% to 25%.
Gross margins for the quarter were 61%, up from 60% last year, and flat with last quarter. The company said is gross margins in the quarter were positively impacted by pricing, product and customer mix. These results are at the high end of the company’s gross margin target range of 57% – 61%. On the company’s earnings call, Goodship said the company may consider raising margin targets in the future.
SG&A in the quarter was C$16.5m, or 39% of revenue, up 9% versus C$15.1m last year (38% of revenue) and C$15.7m last quarter (31% of revenue). The increase was largely due $800,000 of additional expenses related to special projects, including the company’s current review of strategic initiatives, along with higher selling expenses.
R&D expenses before tax credits were C$7.4m or 17% of sales, compared to C$7.6m or 19% of sales during the same period a year ago, and up from $6.2, or 12% of sales last quarter. The company said the year-over-year decrease was due largely to lower amortization charges. Quarterly R&D expenses, net of tax credits, were $6m or 14% of sales, versus $6.2m or 16% of sales in Q1 2011.
Net finance expense was $1.9 million for the quarter, up from $46,000 last year. The increase was largely due to unfavorable currency fluctuations in the current quarter, compared to last year, and an increase in the re-measurement of liabilities related to cash settled share- based payments.
Strategic Review
As widely reported last month, Miranda is in the process of conducting a structured process to evaluate a potential sale of the business. The company said this review of strategic alternatives is well underway, and that although it is actively exploring its options, “no reportable event has yet to occur.” Miranda says the strategic review process is expected to last approximately until approximately mid-June 2012.
Goodship said that while he was pleased with the results in the seasonally lower first quarter of the year, the quarter was a little softer than expected. He said this softness was a worldwide phenomenon, and that the US market continues to be soft. However, Goodship said that he “still believes the year is going to pan out and ramp up in the usual profile, stepping up progressively in Q3 and Q4.
“We continue to remain positive about the future growth prospects of the television industry. We are well placed to capitalize on new opportunities, to outperform market growth and drive profitable results,” said Goodship.
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Related Content:
Press Release: Miranda Reports First Quarter 2012 Results
Previous Quarter: Miranda Reports 27% Revenue Increase in 2011
Previous Year: Miranda Reports Thirty-Seven Percent Revenue Increase in Q1 2011
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