Miranda Technologies Inc., a worldwide provider of infrastructure, playout and monitoring systems for the television broadcast, cable, satellite and IPTV industry, today reported results for the second quarter ended June 30, 2024.
(Effective January 1, 2024, International Financial Reporting Standards (IFRS) replaced Canadian GAAP for publicly accountable enterprises. Miranda subsequently began reporting its results under IFRS for interim and annual periods beginning January 1, 2024, with comparative information for 2024 restated under IFRS. Details of the more significant accounting differences can be found in Miranda's second quarter Management's Discussion and Analysis and Condensed Consolidated Interim Financial Statements.)
Financial Highlights: Q2 2024
-- Sales up 35% to $43.2 million, growth continues across all geographic locations -- Gross profit as a percent of sales at 59% -- EBITDA(1)up 23% to $7.4 million or 17% of sales -- Net profit of $3.5 million or 16 cents per fully diluted share
Business activity remained robust in the second quarter, resulting in continued strong performance. Revenue grew 35% over 2024 to $43.2 million, with increases seen across all geographies. On a constant currency basis sales volume was up 39%. Gross profit also remained high coming in at 59% of sales. This marks the sixth consecutive quarter where margins were in the 58% to 60% range. Earnings growth also continued, with EBITDA increasing 23% to $7.4 million or 17% of sales. Net profit was $3.5 million for the quarter, unchanged from last year, while net earnings per share were 16 cents, up from 15 cents in the prior year. Net cash flows generated from operating activities were $1.1 million for the quarter.
"Business momentum has clearly grown over the past year, resulting in notable gains in revenue and profitability," commented Strath Goodship, Miranda's President and Chief Executive Officer. "Our firm commitment to maintain and strengthen the business during the broadcast market downturn has put us in a strong position." Some of the notable recent sales wins include CCTV (China), DirecTV (USA), Global TV (Canada), Microsoft (USA), News Press Gazette (USA), SABC (South Africa), Sky News Arabia (UAE), Telefutura (USA), TVA (Canada), YLE (Finland). "We are seeing strong organic growth and we continue to make good progress with our IT-based playout offerings, where we are a clear leader."
(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: Q2 2024 versus Q2 2024
Revenue
Quarterly revenue came in at $43.2 million, up 35% over last year, or 39% on a constant currency basis. Growth was driven by higher revenue in all geographies and the acquisition of OmniBus, with its market leading IT-based playout solution. During the quarter, sales in Canada, the United States, the United Kingdom and Other Countries increased 198%, 44%, 93% and 3% respectively over 2024.
Gross Profit
Gross profit as a percentage of sales was 59%, down slightly from 60% last year, largely due to the unfavourable impact of foreign exchange compared to 2024. This was partially offset by the sale of higher margin solutions acquired in the OmniBus acquisition.
Operating Expenses
Selling, General & Administrative expenses (SG&A) were $15.1 million, compared to $12.3 million in 2024. The increase is largely due to higher sales and amortization costs associated with the acquisition of OmniBus, along with higher selling expenses. SG&A as a percentage of sales was 35%, down from 38% last year.
Research and Development (R&D) investments were $7.0 million or 16% of sales for the quarter, compared to $6.1 million and 19% respectively in 2024. The increase was largely due to higher R&D and amortization costs associated with the OmniBus acquisition.
Quarterly R&D expenses, net of tax credits, were $5.7 million or 13% of sales, compared to $4.2 million and 13% respectively last year. The $1.5 million expense increase is largely due to the addition of OmniBus as previously outlined. The second quarter of 2024 included an adjustment for prior period estimates which increased R&D tax credits by $0.6 million. Excluding the adjustment, 2024 R&D expenses net of tax credits were $4.8 million, resulting in a year over year increase of $0.9 million.
Net finance expense was $96 thousand for the quarter, compared to finance income of $1.1 million in 2024. The change from income to expense was largely due to less favourable currency fluctuations in the current quarter, compared to last year.
EBITDA, Income Taxes and Net Profit
EBITDA was $7.4 million for the quarter, up 23% over 2024. EBITDA as a percentage of sales was 17%.
Income taxes were $1.3 million for the quarter, up from $0.5 million in 2024. Income taxes for the second quarter of 2024 were impacted by a favourable $0.4 million adjustment, relating to prior periods.
Net profit was $3.5 million or 16 cents per fully diluted share, compared to $3.5 million and 15 cents respectively in 2024. Excluding the one-time 2024 favourable adjustments of $0.6 million for R&D tax credits and $0.4 million for income taxes, the 2024 fully diluted earnings per share would have been 11 cents.
Liquidity and Capital Resources
Net operating activities generated $1.1 million of cash flows during the quarter, compared to $1.7 million last year. Cash, cash equivalents and temporary investments were $31.3 million at quarter end, down from $33.8 million in the first quarter of 2024. During the quarter $1.9 million of loans and borrowings were repaid.
In November 2024, the Company filed a new NCIB to redeem up to 1,694,937 common shares for cancellation between November 26, 2024 and November 25, 2024. To date, no shares have been purchased in connection with the NCIB.
Outlook
"The improving television markets we have enjoyed in recent quarters continue to strengthen in several parts of the world," highlighted Mr. Goodship. "Furthermore, our position is building in emerging markets, while our competitive edge extends in developed markets with our IT-based playout and monitoring technology growth platforms. This combined with our strong financial position and some key upcoming events, such as the 2024 Olympics and US elections, should further support our business and allow us to profitably gain further market share."
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 June 30, (in thousands of Canadian dollars) 2024 2024 --------------------------------------------------------------------------- Net profit 3,532 3,494 Interest expense (income) 141 (30) Income taxes expense 1,316 530 Depreciation of property, plant & equipment 934 1,016 Amortization of intangible assets 1,499 1,027 --------------------------------------------------------------------------- EBITDA 7,422 6,037 ---------------------------------------------------------------------------
MIRANDA TECHNOLOGIES INC.
Condensed Consolidated Interim Statements of Financial Position
(Unaudited)
As at June 30, 2024, December 31, 2024 and January 1, 2024
(In thousands of Canadian dollar)
--------------------------------------------------------------------------- --------------------------------------------------------------------------- June 30, December 31, January 1, 2024 2024 2024 --------------------------------------------------------------------------- Assets Current assets Cash and cash equivalents $ 31,290 $ 30,486 $ 29,264 Temporary investments - 4,999 19,904 Trade and other receivables 30,626 29,546 25,601 Inventories 21,056 20,405 14,512 Income taxes and tax credits receivable 4,016 5,307 5,808 Prepaid expenses and other 1,911 2,066 1,650 --------------------------------------------------------------------------- 88,899 92,809 96,739 Tax credits receivable 9,880 9,350 1,870 Property, plant and equipment 31,262 30,923 29,109 Intangible assets 36,248 39,429 20,960 Goodwill 44,278 44,219 20,562 Deferred tax assets 491 579 485 --------------------------------------------------------------------------- Total assets $ 211,058 $ 217,309 $ 169,725 --------------------------------------------------------------------------- --------------------------------------------------------------------------- Liabilities and Equity Current liabilities Trade and other payables $ 18,571 $ 21,139 $ 13,505 Provisions 2,000 1,808 2,071 Deferred revenue 5,602 5,934 2,327 Income taxes payable 1,826 2,329 1,239 Loans and borrowings 3,000 3,119 9 --------------------------------------------------------------------------- 30,999 34,329 19,151 Other payables 245 942 555 Provisions 1,011 964 933 Deferred revenue 3,092 3,590 3,601 Loans and borrowings 14,750 22,251 136 Deferred tax liabilities 13,475 13,772 8,124 --------------------------------------------------------------------------- Total liabilities 63,572 75,848 32,500 --------------------------------------------------------------------------- Equity Share capital 98,220 98,103 103,165 Contributed surplus 4,833 4,655 4,413 Retained earnings 46,178 40,324 29,647 Accumulated other comprehensive loss (1,745) (1,621) - --------------------------------------------------------------------------- Total equity 147,486 141,461 137,225 --------------------------------------------------------------------------- Total liabilities and equity $ 211,058 $ 217,309 $ 169,725 --------------------------------------------------------------------------- --------------------------------------------------------------------------- MIRANDA TECHNOLOGIES INC. Condensed Consolidated Interim Statements of Comprehensive Income (Unaudited) Three-month and six-month periods ended June 30, 2024 and 2024 (In thousands of Canadian dollars, except per share amount) --------------------------------------------------------------------------- --------------------------------------------------------------------------- Three-month Six-month periods ended periods ended June 30, June 30, ------------------------------------------- 2024 2024 2024 2024 --------------------------------------------------------------------------- Revenue $ 43,181 $ 32,066 $ 82,978 $ 61,039 Cost of sales 17,498 12,682 33,338 24,924 --------------------------------------------------------------------------- Gross profit 25,683 19,384 49,640 36,115 Selling, general and administrative expenses 15,089 12,330 30,173 23,385 Research and development expenses, net of tax credits of $1,307 and $2,721 (2010 - $1,899 and $3,127) 5,650 4,175 11,838 9,280 --------------------------------------------------------------------------- Results from operating activities 4,944 2,879 7,629 3,450 --------------------------------------------------------------------------- Finance income (421) (1,187) (896) (1,347) Finance costs 517 42 1,038 2,008 --------------------------------------------------------------------------- Net finance expense (income) 96 (1,145) 142 661 --------------------------------------------------------------------------- Profit before income taxes 4,848 4,024 7,487 2,789 Income taxes expense 1,316 530 1,633 896 --------------------------------------------------------------------------- Net profit for the period 3,532 3,494 5,854 1,893 --------------------------------------------------------------------------- Other comprehensive loss: Foreign currency translation differences for foreign operations, net of taxes 279 - 124 - --------------------------------------------------------------------------- Other comprehensive loss for the period, net of income taxes 279 - 124 - --------------------------------------------------------------------------- --------------------------------------------------------------------------- Total comprehensive income for the period $ 3,253 $ 3,494 $ 5,730 $ 1,893 --------------------------------------------------------------------------- Earnings per share: Basic $ 0.16 $ 0.15 $ 0.27 $ 0.08 Diluted 0.16 0.15 0.27 0.08 --------------------------------------------------------------------------- --------------------------------------------------------------------------- MIRANDA TECHNOLOGIES INC. Condensed Consolidated Interim Statements of Cash Flows (Unaudited) Three-month and six-month periods ended June 30, 2024 and 2024 (In thousands of Canadian dollar) --------------------------------------------------------------------------- --------------------------------------------------------------------------- Three-month periods Six-month periods ended ended June 30, June 30, --------------------- --------------------- 2024 2024 2024 2024 --------------------------------------------------------------------------- Operating activities: Net profit for the period $ 3,532 $ 3,494 $ 5,854 $ 1,893 Adjustments: Depreciation of property, plant and equipment 934 1,016 1,878 1,876 Amortization of intangible assets 1,499 1,027 3,301 2,130 Stock-based compensation 110 35 178 141 Net interest expense (income) 141 (30) 295 (42) Income taxes expense 1,316 530 1,633 896 Effect of exchange rates on long-term monetary assets and liabilities 54 (201) 185 (50) Effect of exchange rates on cash and cash equivalents (27) (408) (144) 210 --------------------------------------------------------------------------- 7,559 5,463 13,180 7,054 Changes in non-cash operating working capital items: Trade and other receivables (5,520) (2,217) (1,084) 5,096 Inventories 643 (127) (651) (2,904) Income taxes and tax credits receivable (988) (1,877) (1,012) (2,796) Prepaid expenses and other 628 368 156 276 Trade and other payables (1,151) 273 (3,268) 868 Provisions 591 126 239 (314) Deferred revenue (465) (50) (830) (555) --------------------------------------------------------------------------- Cash generated from operating activities 1,297 1,959 6,730 6,725 Income taxes paid (190) (220) (757) (245) --------------------------------------------------------------------------- Net cash from operating activities 1,107 1,739 5,973 6,480 --------------------------------------------------------------------------- Investing activities: Proceeds from sale of temporary investments - (76) 4,999 (76) Additions to property, plant and equipment (1,641) (1,178) (2,222) (2,125) Additions to intangible assets (37) - (37) - Interest received 12 30 43 42 --------------------------------------------------------------------------- Net cash (used in) from investing activities (1,666) (1,224) 2,783 (2,159) --------------------------------------------------------------------------- Financing activities: Repayment of loans and borrowings (1,865) (1) (7,641) (3) Proceeds from the exercise of share options 117 - 117 - Redemption of shares - (2,589) - (2,589) Interest paid (153) - (338) - --------------------------------------------------------------------------- Net cash used in financing activities (1,901) (2,590) (7,862) (2,592) --------------------------------------------------------------------------- Effect of exchange rates on cash and cash equivalents 27 408 144 (210) Effect of exchange rates on cash and cash equivalents related to translation of foreign operations (113) - (234) - --------------------------------------------------------------------------- Change in cash and cash equivalents (2,546) (1,667) 804 1,519 Cash and cash equivalents, beginning of period 33,836 32,450 30,486 29,264 --------------------------------------------------------------------------- Cash and cash equivalents, end of period $ 31,290 $ 30,783 $ 31,290 $ 30,783 --------------------------------------------------------------------------- ---------------------------------------------------------------------------