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Press release from CNW Group

RDM Corporation Reports Third Quarter Financial Results

Thursday, July 26, 2012

RDM Corporation Reports Third Quarter Financial Results07:00 EDT Thursday, July 26, 2012Payment Processing Services Revenue grows 15% year over yearToronto Stock Exchange Symbol: RCWATERLOO, ON, July 26, 2012 /CNW/ - RDM Corporation (TSX:RC), a leading provider of specialized software and hardware products for electronic payment processing, today reported its financial results for the three month period ended June 30, 2012. All figures are reported in U.S. dollars unless otherwise stated.Q3 2012 HighlightsTotal revenue was $5.2 million in the third quarter of fiscal 2012, an increase of 8% from $4.8 million in Q3 2011, and up 3% from $5.0 million in the previous quarter.Payment Processing Services revenue was $3.0 million, an increase of 15% from $2. 6 million in Q3 2011, and an increase of 4% over the prior quarter.Gross profit was $2.7 million or 53% of revenues in Q3 2012, compared to $2.0 million or 42% of revenues in Q3 2011, and $2.5 million or 50% of revenues in the prior quarter.The Company added 972 new end user seats to bring its ITMS network to 27,506 seats, an increase of 32% from one year earlier and 4% compared to the prior quarter.EBITDA was $1.1 million in the third quarter of 2012, up from $421,000 a year earlier and $565,000 in the prior quarter.  EBITDA in Q3 2012 included $463,000 of non-recurring income.Net income was $728,000 or $0.03 per share in Q3 2012, compared to $151,000 or $0.01 per share in the third quarter of 2011, and $242,000 or $0.01 per share in the prior quarter.The Company generated $1.3 million in cash during the quarter and ended the period with a cash balance of $16.9 million."I am very pleased with our performance this quarter which was driven by continued growth in our transaction processing business," said Randy Fowlie, President and Chief Executive Officer of RDM Corporation.  "We delivered double-digit growth in Payment Processing Services revenue and added nearly 1,000 seats to our network. The market continues to show strong demand for our ITMS service.  Our overall gross margin percentage has improved by more than 10 points in the past year, leading to solid operating profit and bottom line performance in the quarter."Conference CallRDM will be hosting a conference call to discuss the Company's third quarter results on July 26, 2012 at 9:00 a.m. EDT. Dial-in numbers are 647-427-7450 or 1-888-231-8191. The call will be webcast live and archived at Detailed financial results and Management's Discussion and Analysis will be filed on MeasuresEBITDA (earnings before interest, taxes, depreciation and amortization) is provided to assist management and investors in determining the Corporation's approximate operating cash flows before interest, income taxes, and depreciation and amortization. EBITDA does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. Management believes that RDM shareholders and potential investors in RDM use non-IFRS financial measures such as EBITDA in making investment decisions about the Company and measuring the operational results.About RDM CorporationRDM Corporation is headquartered in Waterloo, Ontario and trades on the Toronto Stock Exchange under the symbol RC. RDM is a leading provider of specialized software and hardware products for electronic payment processing. RDM has pioneered electronic check conversion systems and web based image and transaction management services for banks, retailers, payment processors and government agencies as well as print quality control and image quality systems for a variety of global customers. For more information, visit RDM's website at news release contains forward-looking statements. Forward-looking statements are based on estimates and assumptions made by RDM in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that RDM believes are appropriate in the circumstances. Many factors could cause RDM's actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements. Risk factors relating to RDM are discussed in the Risks and Uncertainties section of RDM's Annual Information Form and year-end Management's Discussion and Analysis. These factors should be considered carefully, and readers should not place undue reliance on RDM's forward-looking statements. RDM has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.RDM CORPORATIONCondensed Consolidated Interim Balance Sheets(Amounts in thousands of U.S. Dollars) (Unaudited)       June 30, 2012 September 30,2011Assets:         Current assets:     Cash and cash equivalents$16,881$14,815 Accounts receivable 3,333 2,799 Inventories 2,584 3,455 Investment tax credit receivable 391 520 Prepaid and other assets 561 639 Derivative assets 6 -Total current assets  23,756 22,228     Investment tax credits 438 602Furniture and equipment 2,109 2,455Intangible assets 939 1,162Total assets$27,242$ 26,447     Liabilities and shareholders' equity:         Current liabilities:     Accounts payable and accrued liabilities$1,947$2,376 Deferred revenue 275 279 Derivative liabilities  - 67Total current liabilities 2,222 2,722     Shareholders' equity:     Share capital 19,960 19,960 Contributed surplus 2,271 2,115 Accumulated other comprehensive income 24 - Retained earnings 2,765 1,650Total shareholders' equity 25,020 23,725Total liabilities and shareholders' equity$27,242$26,447RDM CORPORATIONCondensed Consolidated Interim Statements of Income (Amounts in thousands of U.S. Dollars, except per share data) (Unaudited)           Three months endedJune 30 Nine months endedJune 30  2012 2011 2012 2011         Revenue:         Payment Processing Services$2,957$2,581$8,516$7,544 Digital Imaging Products 2,241 2,213 6,235 8,972  5,198 4,794 14,751 16,516Cost of revenue 2,454 2,772 7,277 10,269Gross profit 2,744 2,022 7,474 6,247         Operating expenses:         Sales and marketing 859 784 2,559 2,484 Research and development 1,003 882 2,948 2,667 General and administration 516 437 1,573 1,711  2,378 2,103 7,080 6,862         Results from operating activities 366 (81) 394 615         Other items:         Foreign exchange gain (loss) (66) 204 366 1,834 Interest 25 28 77 87 Other income 463             - 463 -  422 232 906 1,921         Income before income taxes 788 151 1,300 1,306Current income tax expense 60             - 185 -Income for the period$728$151$1,115$1,306         Income per share  - basic and  diluted$0.03$0.01$0.05$0.06RDM CORPORATIONCondensed Consolidated Interim Statements of Comprehensive Income (Amounts in thousands of U.S. Dollars) (Unaudited)           Three months endedJune 30 Nine months endedJune 30    2012     2011 2012     2011         Income for the period$728 $151$ 1,115$1,306         Other comprehensive income:         Effective portion of changes in fair value of cash flow hedges (144) -  24 -Comprehensive income$ 584 $151 $ 1,139$1,306RDM CORPORATIONCondensed Consolidated Interim Statements of Changes in Shareholder's Equity(Amounts in thousands of U.S. Dollars) (Unaudited)                 Sharecapital  Contributedsurplus  Accumulatedothercomprehensiveincome  Retainedearnings  TotalBalance as at October 1, 2010$19,371 $2,083 $ - $1,880 $23,334 Income and comprehensive income -  -  -  1,306  1,306 Repurchase of share capital (164)  28  -  -  (136) Issuance of share capital 753  (230)  -  -  523 Stock-based compensation -  169  -  -  169Balance as at June 30, 2011$19,960 $2,050  - $3,186 $25,196Balance as at September 30, 2011$19,960 $2,115  - $1,650 $23,725 Total comprehensive income for the period:                Income for the period -  -  -  1,115  1,115  Effective portion of changes in fair value of cash flow hedges -  -  24  -  24  -  -  24  1,115  1,139 Stock-based compensation -  156  -  -  156Balance as at June 30, 2012$19,960 $2,271 $24 $2,765 $25,020RDM CORPORATIONCondensed Consolidated Interim Statements of Cash Flows(Amounts in thousands of U.S. Dollars) (Unaudited)       Nine months endedJune 30  2012 2011     Cash provided by (used in):         Operations:    Income for the period$  1,115$1,306 Items not involving cash:     Depreciation of furniture and equipment 591 658 Amortization of intangible assets 268 225 Stock-based compensation 156 169 Interest earned (77) (87) Exchange gains on cash held in foreign currency (453) (770)Change in non-cash operating working capital 202 (237)Cash provided by operations 1,802 1,264Interest received 119 87Net cash provided by operations 1,921 1,351Financing:                                       Issuance of share capital                   - 523 Repurchase of share capital                   - (136)Cash provided by financing activities                   - 387     Investing:     Purchase of furniture and equipment (245) (116) Additions to intangible assets (45) (944)Cash used in investing activities (290) (1,060)     Exchange gains on cash held in  foreign  currency 435 770Increase in cash and cash equivalents 2,066 1,448Cash and cash equivalents, beginning of period 14,815 13,798Cash and cash equivalents, end of period$16,881$15,246 SOURCE: RDM CorporationFor further information: Randy Fowlie CEO & President RDM Corporation (519) 746-8483 x340   Rui Malhinha Chief Financial Officer RDM Corporation (519) 746-8483 x284