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Myriad Group Reports Revenues of USD 84.3 Million and EBITDA of USD 15.2 Million for First Nine Months 2010
- Revenues USD 84.3 million
- Gross profit USD 56.4 million, gross margin of 67%
- EBITDA (pre-restructuring and extraordinary income) USD 15.2 million, EBITDA margin of 18%
- Extraordinary gross income of USD 19 million as a result of sale of IP
- Cash balance USD 36.5 million
Myriad Group AG (SIX: MYRN), a global leader in mobile technology having shipped over 3.7 billion software applications on more than 2.2 billion phones, today reported unaudited revenues of USD 84.3 million for the first nine months of 2010 and underlying operating profit (EBITDA) of USD 15.2 million.
Simon Wilkinson, CEO of Myriad Group AG, commented: "Despite the termination of the contract with Sagem Wireless, underlying Device Solutions Division revenues grew in Q3 whilst gross margin profitability of the Group has improved. In the Mobile Services Division we have made progress toward deployment of our mobile messaging platform services in Latin America. With over USD 36m of cash at the end of September, the Group has strong levels of funding to meet both short and long term needs. "
Revenue reached USD 26.4 million for Q3 2010 compared to USD 31.0 million in Q3 2009. Q3 2010 revenues included Sagem related revenue of USD 7.3 million compared to USD 16.1 million in the same period last year. For the first nine months of 2010 revenues reached USD 84.3 million compared to the first nine months of 2009 pro forma revenue of USD 94.0 million. The decline almost entirely results from the shortfall in revenues with Sagem Wireless following the contract termination and final settlement in September 2010.
The Device Solutions Division - which provides software and engineering services to leading manufacturers of mobile phones and other devices - reported revenue of USD 23.6 million for Q3 2010 compared to USD 28.4 million for the same period last year. For the first nine months of 2010, revenue reached USD 76.2 million compared to USD 83.9 million for the same period last year. The lower revenues reflect the shortfall arising from the Sagem Wireless contract termination. Revenues with other (non-Sagem) customers increased by 3% during the nine-month period in 2010 compared to the previous year.
The Mobile Services Division - which provides social networking solutions and self-care services for mobile network operators - reported revenue of USD 2.8 million in Q3 2010, compared to USD 2.6 million in Q3 2009. For the first nine months of 2010, revenue amounted to USD 8.1 million compared to USD 10.1 million for the first nine months of 2009. Revenues and profitability of the Mobile Services Division are expected to improve significantly, once the social messaging business with Telefónica begins to contribute substantially in 2011 and the strong self-care pipeline is closed.
Gross Profit reached USD 15.7 million in Q3 2010, compared to USD 22.7 million in Q3 2009. For the first nine months of 2010, gross profit amounted to USD 56.4 million compared to USD 61.4 million for the first nine months of 2009. The increase in the proportion of licenses versus services revenue year on year led to an improvement in the gross margin by 1.6 percentage points to 67% for the first nine months of 2010.
Underlying operating profit, EBITDA (before restructuring costs) was USD 2.6 million for Q3 2010, compared to USD 5.4 million for Q3 2009. For the first nine months of 2010 EBITDA reached USD 15.2 million (EBITDA margin of 18%), compared to USD 17.0 million (EBITDA margin of 18%) in the corresponding period last year. The EBITDA after restructuring charges in the nine months of 2010 was USD 11.8 million compared to USD 7.0 million in the same period last year. The decrease in EBITDA in the third quarter of 2010 is a reflection of the lower revenues from Sagem Wireless, whilst the business continued to carry the full headcount and site costs associated with the Sagem contract for the whole of Q3.
Cost savings starting in Q4 2010
The headcount and site costs associated with the Sagem contract have been transferred from Myriad Group from the beginning of November 2010. This will result in savings in personnel and location costs for Myriad Group of approx. USD 17.6 million per annum. In effect Myriad will benefit from 2 months of savings in Q4 2010, with the full benefit contributing in fiscal year 2011.
The Sagem termination will lead to the write-off of Sagem-related goodwill and intangible assets in the range of USD 25-30 million, which will be booked in the 2010 year-end accounts. This is a non-cash item.
IP sale in July 2010 leads to extraordinary income
The sale of certain intellectual property rights for a cash amount of USD 19 million (announced 19 July 2010) leads to an additional extraordinary net income (after disposal costs) of USD 18.3 million in the fiscal year 2010 accounts.
Due to the shortfall in contractual revenues from Sagem of USD 16.4 million for the period September 1 to December 31, 2010, Myriad has to revise its revenue guidance for the current fiscal year 2010 to a range of between USD 100-103 million and EBITDA margin (pre-restructuring) to between 11-13%.
As at the end of September, the Group's position in cash & cash equivalents, including short-term investments and marketable securities was USD 36.5 million (USD 21.9 million as at 30 June 2010) before receipt of Sagem contract termination settlement monies committed to be paid in full in Q4. Of these monies, Euro 7.9 million has been received in October and November, with the final instalment of Euro 1.1 million due in December.
Information on Myriad's Conference Call for Media, Analysts and Investors
Myriad's CEO Simon Wilkinson and CFO James Bodha will host a conference call for members of the media, investors and analysts today at 10:00 am CET.
 EBITDA pre-restructuring expenses
 Comparative pro forma results for the first nine months of 2009 include Purple Labs contribution for the entire period
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