Miranda Technologies (MT)
Q1 2010 Earnings Call
May 5, 2010 2:00 pm ET
Strath Goodship – President, Chief Executive Officer
Mario Settino – Chief Financial Officer
Deepak Chopra – Genuity Capital Markets
Sera Kim – GMP Securities
David Kwan – Cormack Securities
Brian Picciono – BMO Capital Markets
Todd Coupland – CIBC
Chris Umiastowski – TD Newcrest
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Welcome to the Miranda Technologies Q1 2010 results conference call. (Operator Instructions) Joining us on today’s call are Strath Goodship, President and Chief Executive Officer of Miranda Technologies and Mario Settino, Chief Financial Officer.
Before turning the call over to management, please be advised that today’s remarks forward-looking statements and reflect Miranda’s objectives, estimates and expectations. Such statements may be marked by the use of expressions 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 uncertainties. Consequently, results could differ materially from the company’s expectations. Miranda’s business remains subject to risk factors described in the company’s annual information form available on Sedar under the heading Risk Factors. Any forward-looking statement represents the company’s current expectations and accordingly, are subject to change. The company disclaims any intention and assumes no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise unless required to do so by applicable security laws.
I would now like to remind everyone that this conference is being recorded as of Wednesday, May 5, 2020 at 2:00 pm Eastern time. We will now turn the conference over to Mr. Strath Goodship.
Good afternoon everyone. Thanks for joining us. As mentioned, the purpose of today’s call is to review our results for the quarter ended March 31, 2010, which were released earlier today. For your convenience, the press release is also available on our website at Miranda.com/investors and will also be available on Sedar. Joining me on today’s call is Mario Settino, our Chief Financial Officer.
Turning to our results, quarterly sales were $29 million, down from $33.2 million last year. Excluding foreign exchange, volumes were up 1% over 2009. International markets remain strong, increasing 26% as we saw meaningful improvement in Canada, recording a quarterly gain of 116%. Although U.S. sales were still lagging the rest of the market with revenues declining 50% over last year, customer interest appears to be building.
In addition to stronger sales outside of the U.S., our gross margins also improved considerably, coming in at 58% of sales and we continue to generate strong cash flows.
The company recorded a net loss of $1.7 million or $0.07 per share. This compares to a net income of $1.1 million and $0.05 per share in 2009. Expenses for the quarter included a $1.9 million foreign exchange loss, which Mario will discuss shortly.
Despite the weak macroeconomic environment over the past year, Miranda has continued to invest significantly in R&D and bring new impetus solutions to the market. In April, we showcased many new products at the National Association of Broadcasters Show in Vegas. There was strong interest at the event for both Stereoscopic 3D technologies and for products that take cost out of broadcast infrastructure; two areas in which Miranda is leading.
For Stereoscopic 3D, our new launches included a Stereoscopic 3D multi-viewer, a local generator channel brander and video processor for which we won a show award. These 3D products were on display on one of the first broadcast 3D production trucks recently completed by [Almawel] Video.
We also demonstrated our first video processor equipped with Sensio 3D technology, polling our recently announced partnership with Sensio to develop a suite of products that will enable end to end Stereoscopic 3D play out.
Some examples of our cost saving innovations introduced at the show included a compact card based multi-viewer as well as an enterprise class router with integrated audio processing, both of which offer significant space and cost savings.
We also showed network wide electronic lip sync monitoring, implemented control and view automatic loud responder and control solutions for which we received a second show award.
In summary, after removing unfavorable movements of foreign exchange, sales had some strength in the first quarter. As well, gross margin improved over recent quarters and we remained a strong cash generator. We continue to believe broadcast markets have stabilized. Internationally, markets appear to be in a broad based recovery in the U.S., despite the lower sales in the first quarter.
We believe that the level of sales activity and the solid response we received from U.S. broadcasters at NAB will translate to stronger U.S. sales going forward.
We know that television advertising forecasts, a leading indicator of broadcast capital expenditure, have been revised upward recently and U.S. station groups have shown more optimism than last year, particularly for the second half of the year.
Our extensive product reach, sound financial position, combined with a number of sporting and political events in 2010 will clearly allow us to benefit from improvements in demand.
I’ll now turn the call over to Mario
Thank you, Strath and good afternoon everyone. As usual, I would like to cover a few things before beginning. First, I’d like to remind you that today’s remarks may contain forward-looking statements. Secondly, references to dollars referred to are in Canadian dollars. Finally, I would like to note that N-Vision, which was acquired on December 22, 2008, has been fully integrated into operations and we will no longer be providing sales numbers separately.