The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from CNW Group

RDM Corporation Reports Fourth Quarter and Year End Financial Results

Thursday, November 22, 2012

RDM Corporation Reports Fourth Quarter and Year End Financial Results07:00 EST Thursday, November 22, 2012Strong performance in Payment Processing Drives Increased Profitability Toronto Stock Exchange Symbol: RCWATERLOO, ON, Nov. 22, 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 year and three-month period ended September 30, 2012. All figures are reported in U.S. dollars unless otherwise stated.Q4 2012 HighlightsTotal revenue was $5.7 million in the fourth quarter of fiscal 2012, an increase of 16% from $4.9 million in Q4 2011, and up 9% from $5.2 million in the previous quarter.Payment Processing Services revenue was $3.1 million, up 17% from $2.7 million in Q4 2011, and a 6% increase over the prior quarter.Revenue for Digital Imaging Products increased by 13% to $2.6 million, as compared to $2.3 million for Q4 of 2011. Compared to Q3 2012, revenues for Digital Imaging were up by 18% from $2.2 million.Gross profit was $2.9 million or 54% of revenues in Q4 2012, compared to $2.2 million or 46% of revenues in Q4 2011, and $2.7 million or 53% of revenues in the prior quarter.The Company ended the year with over 28,500 seats on its ITMS network, an increase of 30% from one year earlier and 4% compared to the prior quarter.EBITDA was $983,000 in the fourth quarter of 2012, compared to negative EBITDA of $854,000 a year earlier.Net income was $616,000 or $0.03 per share in Q4 2012, compared to a $1.5 million loss in the fourth quarter of 2011.Operating Income was $462,000, as compared to $76,000 for the same period last year.The Company generated $2.3 million in cash from operations during the quarter and ended the period with a cash balance of $18.9 million.2012 Annual HighlightsTotal revenue in 2012 was $20.4, down 4.7% from $21.4 million in 2011Payment Processing Services revenue grew by 14% from $10.2 million in 2011 to $11.6 million in 2012. Digital Imaging revenue was $8.8 million in 2012 compared to $11.2 million in 2011.Gross profit increased from $8.4 million in 2011 to $10.4 million in 2012 and as a percentage of revenue grew from 39% to 51%.The Company added over 6,500 new end user seats during the year, an increase of 30% over 2011.Net income for 2012 was $1.7 million, compared to a net loss of $230,000 in 2011.EBITDA for 2012 was $3.1 million, up 138% from $1.3 million in 2011.The Company generated $4.2 million in cash from operations during the year. The Company ended the year with $18.9 million in cash and cash equivalents."I am very pleased with our performance for 2012," stated Randy Fowlie, President and CEO of RDM, "We continue to see strong customer adoption of our Payment Processing Services, as evidenced by the 30% growth in seats. We won major new accounts within the small business groups of our existing customer base. In addition, we are seeing a strong pipeline of mobile pilots with our existing financial institutions.""We reported a $1.9 million improvement in our bottom line, and generated $4.2 million in cash from operations. While our Digital Imaging revenue was down year over year, our gross margins improved.  We ended the year with $18.9 million in cash. This strong cash position provides us the opportunity to make investments where necessary to grow our business""We feel we have accomplished a lot this past year, both in terms of profitability and sales momentum, and we look forward to building on this progress throughout fiscal 2013."Conference CallRDM will be hosting a conference call to discuss the Company's fourth quarter results on November 22, 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 www.rdmcorp.com. Detailed financial results and Management's Discussion and Analysis will be filed on www.sedar.com.Non-IFRS 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 www.RDMCorp.com.This 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 CORPORATIONConsolidated Statements of Financial Position(Amounts in thousands of U.S. Dollars)           September 30, 2012September 30,2011Assets:           Current assets:     Cash and cash equivalents$ 18,897$ 14,815 Accounts receivable     3,094       2,799 Inventories     2,469     3,455 Investment tax credit receivable       336       520 Prepaid and other assets      569        639 Derivative assets         63          -Total current assets   25,428    22,228     Investment tax credits     453       602Furniture and equipment  1,951       2,455Intangible assets     860       1,162Total assets$ 28,692$ 26,447     Liabilities and shareholders' equity:         Current liabilities:     Accounts payable and accrued liabilities$ 2,577$ 2,376  Deferred revenue      275     279  Derivative liabilities           -      67Total current liabilities    2,852   2,722     Deferred income tax liability        -        -            Shareholders' equity:             Share capital    19,960  19,960  Contributed surplus       2,323      2,115  Accumulated other comprehensive income         116             -  Retained earnings      3,441      1,650Total shareholders' equity    25,840   23,725Commitments              Total liabilities and shareholders' equity$ 28,692$ 26,447RDM CORPORATIONConsolidated Statements of Income(Amounts in thousands of U.S. Dollars, except per share data)                   Three months endedSeptember 30Year endedSeptember 30  2012 2011 2012 2011         Revenue:         Payment Processing Services$ 3,131$  2,662$ 11,647$ 10,206 Digital Imaging Products   2,558   2,254      8,793  11,226    5,689  4,916      20,440   21,432Cost of revenue    2,763   2,751       10,040   13,020Gross profit  2,926   2,165       10,400    8,412         Operating expenses:         Sales and marketing     854     833       3,413   3,317 Research and development  1,108     913       4,056   3,580 General and administration     502     343       2,075    2,054     2,464   2,089       9,544   8,951         Results from operating activities     462       76       856   (539)         Other items:         Foreign exchange gain (loss)     134   (1,250)        501      584 Interest income       13        27        90      114 Other income (expense)      65    (422)      528     (422)    212   (1,645)  1,119      276         Income (loss) before income taxes      674   (1,569)   1,975   (263)Current income tax recovery (expense)        -        33    (184)      33Income (loss) for the period$ 674$  (1,536)$ 1,791$ (230)         Income (loss)  per share  - basic and diluted$ 0.03$          (0.07)$ 0.08$ (0.01)RDM CORPORATIONConsolidated Statements of Comprehensive Income(Amounts in thousands of U.S. Dollars)                   Three months endedSeptember 30Year endedSeptember 30  2012 2011 2012 2011         Income (loss) for the period$ 674$ (1,536)$ 1,791$ (230)                      Other comprehensive income:          Effective portion of changes in fair value of cash flow hedges       92             -       116      -Comprehensive income (loss)$ 766$ (1,536)$ 1,907$ (230)  RDM CORPORATIONConsolidated Statements of Changes in Shareholder's Equity(Amounts in thousands of U.S. Dollars)                       SharecapitalContributedsurplusAccumulatedothercomprehensiveincomeRetainedearningsTotalBalance as at October 1, 2010$     19,371$ 2,083$ -$ 1,880$ 23,334 Income (loss) and comprehensive income (loss)             -           -          -    (230)      (230) Repurchase of share capital         (164)        28            -            -      (136) Issuance of share capital            753   (230)            -            -     523 Stock-based compensation             -   234            -            -     234Balance as at September 30, 2011$      19,960$ 2,115            -$ 1,650$ 23,725 Total comprehensive income for the period:            Income for the period             -          -            -    1,791    1,791  Effective portion of changes in fair value of cash flow hedges             -          -         116            -       116              -          -         116    1,791    1,907 Stock-based compensation            -     208             -         -      208Balance as at September 30, 2012$      19,960$ 2,323$ 116$ 3,441$ 25,840RDM CORPORATIONConsolidated Statements of Cash Flows(Amounts in thousands of U.S. Dollars)                   Three months endedSeptember 30Year endedSeptember 30  2012 2011 2012 2011         Cash provided by (used in):                 Operations:                                Income (loss) for the period$ 674 $ (1,536)$ 1,791$ (230)          Items not involving cash:          Depreciation of furniture and equipment   218        231      809      889  Amortization of intangible assets    101         90       369      316  Future income taxes        -      (208)            -     (195)  Write-down of furniture and equipment        -        393          -      393  Write-down of intangible assets        -         87          -        87  Stock-based compensation 52 65 208 234  Interest earned (13) (28) (90) (115)  Exchange gains (losses) on cash held in foreign currency 246 165 (209) (605)Change in non-cash operating working capital 959 668 1,161 417Cash provided (used in) by operations  2,237       (73) 4,039 1,191Interest received       27            1 146 88Net cash provided (used in) by operations  2,264       (72) 4,185 1,279         Financing:                        Issuance of share capital      -     -        -         523 Repurchase of share capital      -       -        -      (136)Cash provided by financing activities      -         -       -      387         Investing:         Purchase of furniture and equipment  (60)    (164) (305)     (280) Additions to intangible assets   (22)      (57)   (67)  (1,001)Cash used in investing activities   (82)     (221)  (372)   (1,281)         Exchange gains (losses) on cash held in foreign currency  (166)   (138)            269     632Increase (decrease) in cash and cash equivalents  2,016     (431)         4,082   1,017Cash and cash equivalents, beginning of period 16,881   15,246       14,815  13,798Cash and cash equivalents, end of period$ 18,897$ 14,815$ 18,897$ 14,815  SOURCE: RDM CorporationFor further information: Randy Fowlie CEO & President RDM Corporation (519) 746-8483 x340 rfowlie@rdmcorp.com   Rui Malhinha Chief Financial Officer RDM Corporation (519) 746-8483 x284 rmalhinha@rdmcorp.com