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Myriad Group First Quarter 2010 Results
- Revenues USD 28.5 million
- Gross profit USD 19.1 million, gross margin of 67%
- EBITDA USD 4.5 million, EBITDA margin of 16%
- Improved sales and booking performance from the Mobile Services Division following reorganisation of management and sales teams
- Significant mobile social networking contract win with Telefónica, USD 80-100 million over five years
- Guidance for FY 2010 and longterm outlook for 2011/2012 confirmed
Myriad Group AG (SIX: MYRN), a global leader in mobile technology with software in over 2 billion phones, announced further details of its Q1 2010 results today.
Revenue for Q1 2010 amounted to USD 28.5 million compared to Q1 2009 pro forma revenue of USD 32.2 million.
The Device Solutions Division - which provides software and engineering services to leading manufacturers of mobile phones and other devices - reported revenue of USD 25.5 million for Q1 2010, compared to USD 30.2 million for the same period last year. The lower revenues reflected reduced services income year on year.
The Mobile Services Division - which provides social networking solutions and selfcare services for mobile network operators - reported revenue of USD 3.0 million in Q1 2010, compared to USD 2.0 million in Q1 2009. The increase reflects stronger license sales following the reorganization of the divisional management and sales teams last October. In addition the closing order backlog doubled quarter on quarter from USD 2.3 million to USD 5.1 million.
Gross Profit reached USD 19.1 million in Q1 2010, compared to USD 20.0 million in Q1 2009. An increase in the proportion of licenses versus services revenue year on year led to an improvement in the gross margin to 67% for Q1 2010 compared to 62% for the same period last year. The gross margins achieved in Q1 2010 were 69% for the Device Solutions Division and 51% for the Mobile Services Division, respectively.
Total operating expenses for Q1 2010 amounted to USD 14.6 million or 51% of revenues compared to USD 12.4 million or 39% of revenues in Q1 2009. The difference comprises increased R&D where Myriad continues to refresh both the Device Solutions and Mobile Services Divisions' product portfolios and the level of nonrecurring grant income (accounted for in "other income") in Q1 2009.
Underlying operating profit, EBITDA was USD 4.5 million for Q1 2010, reflecting EBITDA margin of 16%. In Q1 2009 the EBITDA before restructuring charges amounted to USD 7.6 million and 24% margin. The lower year on year EBITDA margin reflects the lower services revenues and the level of non- recurring grant income that was included in Q1 2009. EBITDA after restructuring charges for Q1 2009 was USD 5.7 million and 18% margin.
Cash & cash equivalents, including shortterm investments and marketable securities, were USD 17.2 million as of March 31, 2010 (USD 38.0 million as of Dec. 31, 2009). The reduction primarily reflected the renegotiation of cash terms with Sagem Wireless, a key customer of Myriad Group AG which resulted in the deferred cash collection of USD 16.3 million to Q3 2010.
Myriad management are currently in intensive discussions with Sagem Wireless for the transfer of up to 30 engineering heads based in France to Sagem Wireless.
Simon Wilkinson, CEO of Myriad Group AG, comments: "Whilst Q1 revenue levels were modest, they are in line with plan and our profitability continues to be solid at 16% EBITDA margin. We expect revenues to now grow quarteronquarter through the year. I was particularly pleased with the performance of the Mobile Services Division where recent changes to management and the sales team have resulted in improved order intake and a major contract win with Telefónica.''
"With regard to guidance, we continue to expect underlying revenues (excluding foreign currency effects) to be stable. However with the recent significant weakening of the Euro and circa 40% of Myriad revenues denominated in Euros, management believe gross 2010 revenues will decline 3-5% year on year. Since the majority of our Euro income is balanced with Euro costs, we do not expect the Euro weakening to impact profitability. Hence we continue to guide EBITDA margin in the range of 15-18% for 2010."
In addition, the two major contracts that we secured since the beginning of 2010 (Telefónica USD 80-100 million over five years; USD 5 million for Java solutions used in Bluray players over two to three years), combined with the potential for further similar deals and our planned product launches later in 2010 and first half of 2011 make us confident of our targeted annual revenue growth of 15-20% for the upcoming fiscal years 2011/2012."
Information on Myriad's Conference Call for Media and Analysts
Myriad's CEO Simon Wilkinson and CFO James Bodha will host a conference call for members of the media, investors and analysts today at 09:30 am CET.
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Annual General Meeting
Q2 / Half Year 2010 Results
25 May 2010
1 September 2010
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