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Press release from CNW Group

RDM Corporation Reports Fiscal 2013 First Quarter Results

Thursday, January 31, 2013

RDM Corporation Reports Fiscal 2013 First Quarter Results07:00 EST Thursday, January 31, 2013Growth in Payment Processing Drives Higher Margins Toronto Stock Exchange Symbol: RCWATERLOO, ON, Jan. 31, 2013 /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 December 31, 2012. All figures are reported in U.S. dollars unless otherwise stated.Q1 2013 HighlightsTotal revenue was $4.8 million in the first quarter of fiscal 2013, an increase of 5.8% from $4.5 million in Q1 2012.Payment Processing Services revenue was $3.1 million, up 14% from $2.7 million in Q1 2012.Revenue for Digital Imaging Products came in at $1.7 million, 7% below Q1 of 2012.Gross profit was $2.7 million, or 58% of revenues in Q1 2013, compared to $2.2 million or 49% of revenues in Q1 2012.The Company added 1,147 new end user seats to bring its ITMS network to 29,658 seats, an increase of 19% from one year earlier.Adjusted EBITDA was $559,000 in the first quarter of 2013, up from $158,000 for the same period last year.Net income for the quarter came in at $192,000, or $0.01 per share, compared to $144,000, or $0.01 per share last year.The Company generated $642,000 in cash from operations during the quarter and ended the period with a cash balance of $19.4 million.The Company added two new financial services customers during the quarter.Randy Fowlie, President and CEO of RDM, stated: "We are pleased with the solid growth in Payment Processing Services revenue. However, the business climate in the U.S. continues to be difficult and revenues from Digital Imaging products were slightly behind expectations. That said, overall revenues were up compared to last year and we saw a significant improvement in the gross margin for both product lines, coming in at 67% and 40% respectively, as compared to 51% and 37% respectively for the same period last year.""With well over a thousand end user seats added in the quarter to our ITMS network, the product mix continues to shift towards our higher margin business and is a strong driver of profitability. In addition, we added two new financial institutions this past quarter. Later in the year, we will launch an upgrade of our hardware, which should further strengthen RDM's position in the POS scanner field."Conference CallRDM will be hosting a conference call to discuss the Company's third quarter results on 31 January 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 MeasuresAdjusted EBITDA (earnings before interest, taxes, depreciation and amortization adjusted for foreign exchange gains and losses, stock-based compensation and one time charges) is provided to assist management and investors in determining the Company's approximate operating cash flows before interest, income taxes, and depreciation and amortization. Adjusted 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 adjusted 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)    December 31, 2012September 30, 2012Assets:     Current assets:        Cash and cash equivalents$ 19,366$ 18,897      Accounts receivable      2,8123,094      Inventories      2,9302,469      Investment tax credit receivable 150336      Prepaid and other assets      636569      Derivative assets4763Total current assets       25,94125,428   Investment tax credits      409453Property and equipment2,0301,951Intangible assets         742860Total assets$ 29,122$ 28,692   Liabilities and shareholders' equity:     Current liabilities:     Accounts payable and accrued liabilities$    2,816                   $ 2,577 Deferred revenue      282275Total current liabilities       3,0982,852   Shareholders' equity:                     Share capital        19,97919,960      Contributed surplus          2,3652,323      Accumulated other comprehensive income      47116 Retained earnings          3,6333,441Total shareholders' equity        26,02425,840Contingencies  Total liabilities and shareholders' equity$ 29,122$ 28,692RDM CORPORATIONCondensed Consolidated Interim Statements of Income (Amounts in thousands of U.S. Dollars, except per share data)(Unaudited)   Three months ended December 3120122011   Revenue:   Payment Processing Services$ 3,108$ 2,723 Digital Imaging Products      1,659            1,783       4,767            4,506Cost of revenue      2,018            2,293Gross profit      2,749            2,213   Operating expenses:        Sales and marketing      841            898      Research and development      1,095            964            General and administration      555            526       2,491            2,388   Results from operating activities      258            (175)   Other items:        Foreign exchange gain (loss)            (40)            355      Interest            12            28             (28)            383   Income before income taxes      230            208Current income tax expense      38            64Income for the period$ 192      $ 144   Income per share  - basic and diluted$        0.01      $        0.01RDM CORPORATIONCondensed Consolidated Interim Statements of Comprehensive Income (Amounts in thousands of U.S. Dollars)(Unaudited)   Three months ended December 31     2012     2011   Income for the period      $ 192      $ 144   Other comprehensive income:        Effective portion of changes in fair value of cash flow hedges            (69)            87Comprehensive income      $ 123      $ 231  RDM CORPORATIONCondensed Consolidated Interim Statements of Changes in Shareholder's Equity(Amounts in thousands of U.S. Dollars)(Unaudited)       SharecapitalContributedsurplusAccumulatedothercomprehensiveincomeRetainedearningsTotalBalance as at October 1, 2011$  19,960$  2,115$  -$  1,650$  23,725 Total comprehensive income for the period:        Income for the period            -            -            -            144            144  Effective portion of changes in fair value of cash flow hedges            -            -            87            -            87             -            -            87            144            231 Stock-based compensation             -            59            -            -            59Balance as at December 31, 2011$  19,960$  2,174$  87$  1,794$  24,015Balance as at September 30, 2012$  19,960$  2,323$  116$  3,441$  25,840 Total comprehensive income for the period:       Income for the period            -            -            -            192            192  Issuance of share capital            19            (4)            -            -            15  Effective portion of changes in fair value of cash flow hedges            -            -            (69)            -            (69)             19,979            2,319            47            3,633            25,978 Stock-based compensation            -            46            -            -            46Balance as at December 31, 2012$  19,979$  2,365$  47$  3,633$  26,024RDM CORPORATIONCondensed Consolidated Interim Statements of Cash Flows(Amounts in thousands of U.S. Dollars)(Unaudited)   Three months ended December 31            2012            2011   Cash provided by (used in):     Operations:  Income for the period  $  192$  144 Items not involving cash:    Depreciation of property and equipment       137            186  Amortization of intangible assets            118            88  Stock-based compensation            46            59  Interest earned            (12)            (25)  Exchange gains on cash held in foreign currency            (100)            (389)Change in non-cash operating working capital            246            (252)Cash provided by operations    627            (189)Interest received                15        11Net cash provided by (used in) operations            642            (178)Financing:                                     Issuance of share capital            15            - Repurchase of share capital            -            -Cash provided by financing activities            15            -   Investing:   Purchase of property and equipment            (216)            (21) Additions to intangible assets            -            -Cash used in investing activities            (216)            (21)   Exchange gains on cash held in foreign currency            28    476Increase in cash and cash equivalents            469            277Cash and cash equivalents, beginning of period            18,897            14,815Cash and cash equivalents, end of period   $  19,366$  15,092   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