MONTREAL, July 31 /CNW Telbec/ - Miranda Technologies Inc. (TSX: MT), a global developer, manufacturer and marketer of high-performance hardware and software for the television broadcast industry, today reported results for the second quarter of its 2007 fiscal year, ended June 30.
In the second quarter of 2007, sales were $27.8 million, compared to $28.3 million in the corresponding period in 2006 and an increase of 32% over the first quarter of 2007. It should be noted that, in the second quarter of 2006, $2 million in sales resulting from the reversal of deferred revenue were recognized. Excluding this reversal, second-quarter sales were 6% higher than in the same period in 2006.
Sales in the United States were stable compared to last year's second quarter. However, excluding the reversal of deferred revenue recorded in the second quarter of 2006, sales increased by 17% for the quarter. Strath Goodship, President and CEO of Miranda noted: "During the second quarter, Miranda sales benefited from an increased activity level for high definition build-outs in the Americas." Internationally, sales were comparable with the previous year.
"In Asia", added Mr. Goodship, "after a slow first quarter, sales picked up in the second quarter, increasing by 20% over the same period in 2006. This is the result of an increase in opportunities, aggressive discounting in certain markets and the restructuring of our Asian sales organization over the past year."
The new Kaleido-X multi-image processor, is being delivered according to plan and is allowing Miranda to win key accounts. Further development on the Kaleido-X is on track and will continue during the rest of 2007 to integrate all the key functionalities of the incumbent product (Kaleido-K2) into the new platform.
R&D investments for the quarter grew by 4% compared to the same period in 2006. This intended increase allowed Miranda to pursue its development plans and improve the speed of new product introductions.
The gross margin as a percentage of sales decreased by 5% compared to the same period in 2006. The decrease in the margin is mainly attributable to product and customer mix and to the strength of the Canadian dollar versus the other currencies in which Miranda concludes sales. Management estimates that the rapid and substantial decline of the US dollar and its impact on component costs accounts for a drop of approximately two percentage points in the gross margin for the period.
EBITDA was $4.0 million, compared to $6.3 million in 2006. Net income for the period was $2.0 million compared to $4.2 million in the same period last year, translating into a fully diluted EPS of $0.08 compared to $0.17.
"We have made progress in the second quarter by accelerating the introduction of new products, by focusing on specific markets and by emphasizing customer support. The products we announced in April, such as the Kaleido-X, the Imagestore 750, the XVP-1801 and the Jazz-800 continue to receive positive reactions from customers. We are very pleased with the level of orders received particularly for new products and we believe that it will have an impact on our 2007 performance as we deliver them in the second half of the year," concluded Mr. Goodship.
Forward-looking statements
This press release contains forward-looking statements reflecting Miranda's objectives, estimates and expectations. Such statements may be marked by the use of verbs such as 'believe', 'anticipate', 'estimate', 'looking ahead' and 'expect', as well as the use of the conditional or future tense. By their very nature, such statements involve risks and uncertainties. Consequently, results could differ materially from the Company's expectations. Risks that could cause results to differ materially from Miranda's expectations are discussed under the heading Risk Factors in the Company's Annual Information Form, which is available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release represent Miranda's current expectations and, accordingly, are subject to change. However, the Company disclaims any intention and assumes no obligation to update or revise any forward-looking statement, whether as a result of new information or events or otherwise, unless required to do so by the applicable securities legislation.
Conference call
Miranda Technologies Inc. will hold a conference call with financial analysts to present its second-quarter 2007 results on August 1st at 10:00 AM (Eastern Time). Those interested should call 514-807-8791 (Montreal or overseas) or 800-732-0232 (elsewhere in North America).
The call can also be accessed via a direct broadcast site at the following addresses: www.miranda.com, www.newswire.ca and www.q1234.com. The webcast of the conference call will be available for a period of 90 days.
Those unable to participate can hear a recording of the call by dialling 1-877-289-8525 and entering the code 21239183(number sign) on the telephone keypad. This recording will be accessible from 12:00 PM on Wednesday, August 1, 2007 to 11:59 PM on Wednesday, August 8, 2007.
About Miranda
Miranda Technologies Inc. (TSX: MT) develops, manufactures and markets high-performance hardware and software for the television broadcast industry. Its solutions are purchased by content creators, broadcasters, specialty channels and television service providers to enable and enhance the transition to a complex multi-channel digital and HDTV broadcast environment. This equipment allows customers to generate additional revenue while reducing costs through more efficient distribution and management of content as well as the automation of previously manual processes. Miranda employs over 400 people at its Montreal headquarters and in its facilities located in Wallingford (UK), Springfield (New Jersey, USA), Paris (France), Tokyo (Japan), Beijing (China) and Hong Kong. Miranda became a public company in December 2005 and is listed on the Toronto Stock Exchange. For more information, please visit www.miranda.com.
The selected consolidated financial information set out below for the second quarter of the fiscal year ending December 31, 2007 is unaudited, presented in Canadian dollars and prepared in accordance with Canadian generally accepted accounting principles. The following information should be read in conjunction with the Company's interim unaudited consolidated financial statements and notes thereto, which have been filed on SEDAR.
CONSOLIDATED BALANCE SHEETS
(In thousands of Canadian dollars)
June 30, 2007 and December 31, 2006
-------------------------------------------------------------------------
-------------------------------------------------------------------------
June 30, December 31,
2007 2006
-------------------------------------------------------------------------
(Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $ 62,184 $ 40,378
Temporary investments - 22,179
Accounts receivable 19,844 17,710
Inventories 16,396 15,292
Income taxes receivable 4,518 5,279
Prepaid expenses 762 886
Future income taxes 663 625
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104,367 102,349
Capital assets 13,839 13,498
Intangible assets 7,043 7,937
Goodwill 3,933 3,933
-------------------------------------------------------------------------
$ 129,182 $ 127,717
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-------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued charges $ 12,142 $ 14,649
Deferred revenue 399 298
Income taxes payable 969 1,015
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13,510 15,962
Deferred revenue 1,494 1,040
Future income taxes 2,238 2,313
Shareholders' equity:
Share capital (note 3) 111,846 111,784
Contributed surplus (note 3) 1,761 1,216
Deficit (1,655) (4,598)
Accumulated other comprehensive income
(notes 2 and 4) (12) -
-----------------------------------------------------------------------
111,940 108,402
Contingencies (note 5)
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$ 129,182 $ 127,717
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-------------------------------------------------------------------------
See accompanying notes to unaudited consolidated financial statements.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three-month and six-month periods ended June 30, 2007 and 2006
(In thousands of Canadian dollars, except per share amounts)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Three-month periods ended Six-month periods ended
June 30, June 30,
--------------------------- ---------------------------
2007 2006 2007 2006
-------------------------------------------------------------------------
Sales $ 27,807 $ 28,332 $ 48,836 $ 52,433
Cost of sales 12,329 10,986 20,979 20,727
-------------------------------------------------------------------------
15,478 17,346 27,857 31,706
Operating expenses:
Selling, general
and
administrative 8,508 8,670 16,413 15,456
Research and
development 4,179 4,037 8,345 7,603
Research and
development
tax credits (995) (850) (1,994) (1,400)
Interest (561) (420) (1,290) (865)
Foreign exchange
(gain) loss 28 (538) (72) (960)
Stock-based
compensation 293 147 545 232
Amortization
of intangible
assets 447 466 894 925
-------------------------------------------------------------------------
Income before
income taxes 3,579 5,834 5,016 10,715
Income taxes:
Current 1,665 813 2,249 1,480
Future (94) 871 (129) 1,687
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1,571 1,684 2,120 3,167
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Net income $ 2,008 $ 4,150 $ 2,896 $ 7,548
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-------------------------------------------------------------------------
Net earnings
per share
(note 3 (c)):
Basic $ 0.08 $ 0.17 $ 0.12 $ 0.31
Diluted 0.08 0.17 0.12 0.30
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-------------------------------------------------------------------------
Basic weighted
average number
of common shares
outstanding 24,741,490 24,246,168 24,733,776 24,099,825
Diluted weighted
average number
of common shares
outstanding 25,086,116 25,014,056 25,105,267 24,990,082
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-------------------------------------------------------------------------
See accompanying notes to unaudited consolidated financial statements.
CONSOLIDATED STATEMENTS OF DEFICIT
(Unaudited)
Three-month and six-month periods ended June 30, 2007 and 2006
(In thousands of Canadian dollars)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Three-month periods ended Six-month periods ended
June 30, June 30,
--------------------------- ---------------------------
2007 2006 2007 2006
-------------------------------------------------------------------------
Deficit, beginning
of period $ (3,663) $ (20,178) $ (4,598) $ (23,576)
Adjustment due to
the new
accounting
policies adopted
regarding
financial
instruments (net
of income taxes
of $22) (note 2) - - 47 -
-------------------------------------------------------------------------
Adjusted balance (3,663) (20,178) (4,551) (23,576)
Net income 2,008 4,150 2,896 7,548
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Deficit, end of
period $ (1,655) $ (16,028) $ (1,655) $ (16,028)
-------------------------------------------------------------------------
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Consolidated Statements of Comprehensive Income
(Unaudited)
Three-month and six-month periods ended June 30, 2007 and 2006
(In thousands of Canadian dollars)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Three-month periods ended Six-month periods ended
June 30, June 30,
--------------------------- ---------------------------
2007 2006 2007 2006
-------------------------------------------------------------------------
Net income $ 2,008 $ 4,150 $ 2,896 $ 7,548
Other compre-
hensive income:
Change in fair
value of
available-for-
sale finance
assets 4 - (5) -
-------------------------------------------------------------------------
Comprehensive
income $ 2,012 $ 4,150 $ 2,891 $ 7,548
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-------------------------------------------------------------------------
See accompanying notes to unaudited consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three-month and six-month periods ended June 30, 2007 and 2006
(In thousands of Canadian dollars)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Three-month periods ended Six-month periods ended
June 30, June 30,
--------------------------- ---------------------------
2007 2006 2007 2006
-------------------------------------------------------------------------
Cash flows from
operating
activities:
Net income $ 2,008 $ 4,150 $ 2,896 $ 7,548
Adjustments for:
Depreciation
of capital
assets 533 447 1,038 848
Amortization
of intangible
assets 447 466 894 925
Stock-based
compensation 293 147 545 232
Gain on
disposal of
an investment - - - (100)
Future income
taxes (94) 871 (129) 1,687
Effect of
exchange
rates on cash
and cash
equivalents 620 (87) 712 89
-----------------------------------------------------------------------
3,807 5,994 5,956 11,229
Net change in
operating
working capital
items (1,948) (2,226) (4,283) (3,008)
-----------------------------------------------------------------------
1,859 3,768 1,673 8,221
Cash flows from
financing activities:
Repayment of
long-term debt - (1,793) - (1,793)
Reimbursement of
loan granted to
management - 2,366 - 2,366
Issuance of
common shares 5 1,238 62 1,238
-----------------------------------------------------------------------
5 1,811 62 1,811
Cash flows from
investing
activities:
Additions to
capital assets (554) (632) (1,379) (1,386)
Proceeds from
sale of
investment - - - 100
Proceeds from
sales of
temporary
investments - - 22,179 -
Business
acquisition
(note 2) - (11,641) - (11,641)
-----------------------------------------------------------------------
(554) (12,273) 20,800 (12,927)
Effect of exchange
rates on cash and
cash equivalents (620) 87 (712) (89)
Effect of
comprehensive
income on cash
and cash
equivalents 6 - (17) -
-------------------------------------------------------------------------
Net increase
(decrease) in
cash and cash
equivalents 696 (6,607) 21,806 (2,984)
Cash and cash
equivalents,
beginning of
period 61,488 62,287 40,378 58,664
-------------------------------------------------------------------------
Cash and cash
equivalents, end
of period $ 62,184 $ 55,680 $ 62,184 $ 55,680
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Cash and cash
equivalents are
comprised of:
Cash $ 8,254 $ 12,198 $ 8,254 $ 12,198
Cash equivalents 53,930 43,482 53,930 43,482
-------------------------------------------------------------------------
$ 62,184 $ 55,680 $ 62,184 $ 55,680
-------------------------------------------------------------------------
-------------------------------------------------------------------------
See accompanying notes to unaudited consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Three-month and six-month periods ended June 30, 2007 and 2006
(In thousands of Canadian dollars, except per share amounts)
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Miranda Technologies Inc. (the "Company") was amalgamated under Part 1A of
the Companies Act (Quebec). The Company develops, manufactures and markets
high performance solutions for the television broadcast industry.
1. Basis of presentation:
The accompanying unaudited interim consolidated financial statements of
the Company have been prepared in accordance with Canadian generally accepted
accounting principles on a basis consistent with those followed in the most
recent audited annual consolidated financial statements, except for
recognition and measurement of financial instruments presented per Section
3855 of CICA Handbook, Financial Instruments - Recognition and Measurement,
which required prospective applications. These unaudited interim consolidated
financial statements do not include all information and note disclosures
required by Canadian generally accepted accounting principles for annual
financial statements, and, therefore, should be read in conjunction with the
December 31, 2006 audited consolidated financial statements and the notes
thereto.
Our sales are subject to seasonal fluctuation. Normally, the first quarter
of each year is the weakest and sales activity is more evenly spread over the
remaining quarters.
2. Changes in accounting policies:
Effective at the beginning of its 2007 fiscal year, the Company has
adopted the Canadian Institute of Chartered Accountants ("CICA") Handbook
Section 1530, Comprehensive Income, CICA Handbook Section 3251, Equity, CICA
Handbook Section 3855, Financial Instruments -Recognition and Measurement,
CICA Handbook Section 3861, Financial Instruments - Disclosure and
Presentation, and CICA Handbook Section 3865, Hedges. These new Handbook
Sections, which apply to fiscal years beginning on or after October 1, 2006,
provide comprehensive requirements for the recognition and measurement of
financial instruments, as well as standards on when and how hedge accounting
may be applied. Handbook Section 1530 also establishes standards for reporting
and displaying comprehensive income. Comprehensive income is defined as the
change in equity from transactions and other events from non-owner sources.
Other comprehensive income refers to items recognized in comprehensive income
but that are excluded from net income calculated in accordance with generally
accepted accounting principles.
Under these new standards, all financial instruments are classified into
one of the following five categories: held for trading, held-to-maturity
investments, loans and receivables, available-for-sale financial assets or
other financial liabilities. All financial instruments, including derivatives,
are included on the consolidated balance sheet and are measured either at fair
market value with the exception of loans and receivables, investments
held-to-maturity and other financial liabilities, which will be measured at
amortized cost. Subsequent measurement and recognition of changes in fair
value of financial instruments depend on their initial classification.
Held-for-trading financial investments are measured at fair value and all
gains and losses are included in net income in the period in which they arise.
Available-for-sale financial instruments are measured at fair value with
revaluation gains and losses included in other comprehensive income until the
asset is removed from the balance sheet.
The standards require derivative instruments to be recorded as either
assets or liabilities measured at their fair value unless exempted from
derivative treatment as a normal purchase and sale. Certain derivatives
embedded in other contracts must also be measured at fair value. All changes
in the fair value of derivatives are recognized in earnings unless specific
hedge criteria are met, which requires the Company to formally document,
designate and assess the effectiveness of transactions that receive hedge
accounting. Derivatives that qualify as hedging instruments must be designated
as either a "cash flow hedge," when the hedged item is a future cash flow, or
a "fair value hedge," when the hedged item is a recognized asset or liability.
The unrealized gains and losses related to a cash flow hedge are included in
other comprehensive income. For a fair value hedge, both the derivative and
the hedged item are recorded at fair value in the consolidated balance sheet
and the unrealized gains and losses from both items are included in earnings.
Any derivative instrument that does not qualify for hedge accounting is
marked-to-market at each reporting date and the gains or losses are included
in earnings.
These new standards have to be applied without restatement of prior period
amounts. Upon initial application, all adjustments to the carrying amount of
financial assets and liabilities shall be recognized as an adjustment to the
opening balance of deficit or accumulated other comprehensive income,
depending on the classification of existing assets or liabilities. As at
January 1, 2007, the Company has recorded a $47 (net of income taxes of $22)
reduction to the opening balance of deficit with respect to the financial
assets and liabilities and embedded derivatives and a $7 (net of income taxes
of $3) reduction to the opening balance of accumulated other comprehensive
income with respect to the available-for-sale financial assets.
As at December 31, 2006 and June 30, 2007, all outstanding forward foreign
exchange contracts were reported on a mark-to-market basis and the gains or
losses were included in earnings, because the Company elected not to follow
hedge accounting for these derivatives. The adoption of these standards did
not have a significant impact on the consolidated statement of income.
3. Share capital:
(a) Issued and paid share capital:
-------------------------------------------------------------------------
-------------------------------------------------------------------------
June 30, December 31,
2007 2006
-------------------------------------------------------------------------
24,742,914 common shares (24,706,813 at
December 31, 2006) $ 111,846 $ 111,784
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(b) Stock option plan:
The Company established a stock option plan to attract, retain and provide
an incentive to the employees, directors, officers and consultants, by
providing these persons with the opportunity, through stock options, to
acquire an ownership interest in the Company. The current stock option plan
was adopted in June 2003 to replace prior plans and has been amended and
restated in November 2005 to conform to applicable securities rules and
practices for public companies. The stock option plan is administered by the
Board of Directors. The Board of Directors may determine, in accordance with
the terms of the stock option plan, the terms relating to each option,
including the number of shares subject to each option, exercise price and
expiration date of each option and the extent to which each option is
exercisable during the term of the option. The term of an option granted after
November 2005 cannot exceed 5 years (10 years under the previous plan) and
will usually be vested over three years. All of the options granted pursuant
to the stock option plan before the November 2005 amendment have vested upon
closing of the initial public offering of the Company.
A total of 2,395,185 common shares are reserved for issuance upon exercise
of options issued under the stock option plan. As a result, less than 10% of
the outstanding capital is reserved for issuance upon exercise of all options
or issuable under the stock option plan. After taking into account issued and
cancelled options, 482 991 common shares are available for issuance under this
stock option plan.
The following table summarizes information on stock options outstanding at
June 30, 2007:
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Weighted
average
Number exercise
of options price
-------------------------------------------------------------------------
Balance, beginning of period 931,236 $ 8.83
Granted 226,000 13.13
Exercised (36,101) 1.71
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Balance, end of period 1,121,135 $ 9.93
-------------------------------------------------------------------------
-------------------------------------------------------------------------
The outstanding options at June 30, 2007 are presented in the table below:
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Number of Number of Residual
outstanding vested life
Exercise price options options (years)
-------------------------------------------------------------------------
$ 1.71 205,385 205,385 6.1
$ 3.96 115,000 115,000 7.8
$ 3.96 175,000 175,000 8.0
$16.46 324,000 107,976 3.7
$17.08 50,000 16,665 3.7
$18.82 20,000 6,667 3.9
$17.24 5,750 - 4.1
$14.00 181,000 - 4.7
$ 9.64 45,000 - 4.9
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1,121,135 626,693
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Compensation cost charged against income was $293 (2006 - $147) and $545
(2006 - $232) for the three and six-month periods ended June 30, 2007,
respectively. The offsetting credit has been recorded as contributed surplus.
The fair value of the stock options was estimated using the Black-Scholes
option pricing model using the following assumptions:
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Risk-free interest rate 3.99% - 4.65%
Dividend yield 0%
Expected life 3.5 years
Expected volatility 50%
Weighted average fair value of each option at
grant date $3.64 to $5.63
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-------------------------------------------------------------------------
(c) Earnings per share:
The following table provides the reconciliation between basic and diluted
earnings per share:
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Three month periods ended Six-month periods ended
June 30, June 30,
--------------------------- ---------------------------
2007 2006 2007 2006
-------------------------------------------------------------------------
Net income $ 2,008 $ 4,150 $ 2,896 $ 7,548
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Weighted average
number of common
shares
outstanding 24,741,490 24,246,168 24,733,776 24,099,825
Dilutive effect:
Employees' stock
options 344,626 767,888 371,491 890,257
-------------------------------------------------------------------------
Weighted average
number of diluted
common shares
outstanding 25,086,116 25,014,056 25,105,267 24,990,082
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Basic earnings per
share $ 0.08 $ 0.17 $ 0.12 $ 0.31
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Diluted earnings
per share $ 0.08 $ 0.17 $ 0.12 $ 0.30
-------------------------------------------------------------------------
-------------------------------------------------------------------------
4. Accumulated other comprehensive income:
Available-for-sale financial assets constitute the sole item in
accumulated other comprehensive income. The changes that occurred during the
period were as follows:
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Three month periods ended Six-month periods ended
June 30, June 30,
--------------------------- ---------------------------
2007 2006 2007 2006
-------------------------------------------------------------------------
Balance, beginning
of period, net of
income taxes of
$8 and $3
(note 2) $ (16) $ - $ (7) $ -
Change in fair
value, net of
income taxes of
$(5) and nil,
during the
period 4 - (5) -
-------------------------------------------------------------------------
Balance, end of
period $ (12) $ - $ (12) $ -
-------------------------------------------------------------------------
-------------------------------------------------------------------------
5. Contingencies:
A complaint alleging patent infringement was filed in the United States
District Court for the Northern District of Illinois Eastern Division against
the Company and other defendants in 2005. The complaint alleges that certain
products of the Company infringe one or more of seven United States patents
for which the plaintiffs assert they hold a license. The complaint requests
injunctive relief, damages, costs and such other and further relief against
the Company as the court deems proper. Based on management's review and the
assessment of reports from the Company's United States legal counsel, the
Company believes that the plaintiff's' claim is without merit. The Company has
filed a defense and intends to vigorously defend its position in court.
6. Segmented information:
The Company determined that it operates in a single reportable segment,
the broadcast equipment segment. The single reportable operating segment
derives its revenue from the sales of hardware and software solutions
including related services, training and commissioning.
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Three month periods ended Six-month periods ended
June 30, June 30,
--------------------------- ---------------------------
2007 2006 2007 2006
-------------------------------------------------------------------------
Canada $ 2,897 $ 3,428 $ 4,346 $ 6,798
United States 13,526 13,499 23,343 21,757
Other countries 11,384 11,405 21,147 23,878
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$ 27,807 $ 28,332 $ 48,836 $ 52,433
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Capital assets, goodwill and June 30,
intangible assets 2007
-------------------------------------------------------------------------
Capital Intangible
assets Goodwill assets
-------------------------------------------------------------------------
Canada $ 12,413 $ 3,933 $ 7,043
United States 44 - -
Other countries 1,382 - -
-------------------------------------------------------------------------
$ 13,839 $ 3,933 $ 7,043
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Capital assets, goodwill and December 31,
intangible assets 2006
-------------------------------------------------------------------------
Capital Intangible
assets Goodwill assets
-------------------------------------------------------------------------
Canada $ 12,183 $ 3,933 $ 7,937
United States 50 - -
Other countries 1,265 - -
-------------------------------------------------------------------------
$ 13,498 $ 3,933 $ 7,937
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Sales are attributed to the geographic locations based on the location of
the customers. One customer, and its affiliates, accounted for 20% and 15% of
total sales for the three-month and six-month periods ended June 30, 2007,
respectively (no customer accounted for more than 10% of total sales for the
three-month and six-month periods ended June 30, 2006).