RDM Corporation Reports Second Quarter Financial Results
Toronto Stock Exchange Symbol: RC
Company also announces new appointment to Board of Directors
WATERLOO, ON, May 2 /PRNewswire-FirstCall/ - RDM Corporation (TSX: RC), a leading developer of specialized software and hardware products for electronic payment processing, today reported its financial results for the three month period ended March 31, 2011. All figures are reported in Canadian dollars unless otherwise stated.
Q2 2011 Highlights
- Total revenue was $5.4 million in the second quarter of fiscal 2011, compared to $5.2 million in the second quarter of 2010.
- Payment Processing Services revenue of $2.5 million was up $0.1 million over Q2 2010.
- Digital Imaging Products revenue of $2.9 million was up $0.1 million over Q2 2010.
- End user locations of our Payment Processing Services increased from 19,312 to 19,891 seats during the second quarter.
- EBITDA was $331,000, compared to a loss of $640,000 in Q2 2010. (See "Non-GAAP Measures" below.)
- Net income was $37,000 or $0.00 per share, compared to a net loss of $908,000 or $(0.04) per share in Q2 2010.
- Cash and equivalents were $15.7 million at March 31, 2011, up from $14.6 million at December 31, 2010.
"Our priority for 2011 is to return the company to profitability, and I am pleased to say that we are making progress towards this goal," said Randy Fowlie, President and Chief Executive Officer of RDM Corporation. "This will remain a focus for the remainder of 2011."
Board of Directors
RDM Corporation also announced that it has appointed Lee Matheson to the Company's Board of Directors, effective immediately. Mr. Matheson is the co-founder and managing director of Broadview Capital Management Inc., the advisor to the Broadview Dark Horse L.P., a long/short investment partnership focused on inefficiently priced publicly-traded securities. Prior to founding Broadview in 2008, he was a securities analyst with K.J. Harrison & Partners and AIC Investment Services Inc. covering North American equity and debt securities for six years. Mr. Matheson is a Chartered Financial Analyst (CFA) charter holder.
"We are pleased to welcome Mr. Matheson to the Board of Directors," said Thomas Di Giacomo, Chairman of the Board, RDM Corporation. "He is a shareholder of the company who adds valuable financial expertise to the Board. We expect him to play an important role as we work to build value for RDM shareholders."
Conference Call
RDM will be hosting a conference call to discuss the Company's first quarter results on May 2, 2011 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-GAAP Measures
EBITDA (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 Canadian GAAP and may not be comparable to similar measures presented by other companies. Management believes that RDM shareholders and potential investors in RDM use non-GAAP financial measures such as EBITDA in making investment decisions about the Company and measuring the operational results.
About RDM Corporation
RDM 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 CORPORATION | |||||
| Consolidated Balance Sheets | |||||
| (Amounts In Canadian Dollars, In Thousands) | |||||
| March 31, 2011 Unaudited |
September 30, 2010 Audited |
||||
| Assets: | |||||
| Current assets: | |||||
| Cash and cash equivalents | $ | 15,682 | $ | 14,198 | |
| Accounts receivable | 2,244 | 3,539 | |||
| Inventories | 3,371 | 3,821 | |||
| Investment tax credit receivable | 1,471 | 1,393 | |||
| Other | 1,923 | 1,921 | |||
| Total current assets | 24,691 | 24,872 | |||
| Furniture and equipment | 3,136 | 3,552 | |||
| Intangible assets | 459 | 393 | |||
| Total assets | $ | 28,286 | $ | 28,817 | |
| Liabilities and shareholders' equity: | |||||
| Current liabilities: | |||||
| Accounts payable and accrued liabilities | $ | 3,249 | $ | 4,186 | |
| Deferred revenue | 313 | 370 | |||
| Total current liabilities | 3,562 | 4,556 | |||
| Future income tax liability | 201 | 201 | |||
| Shareholders' equity: | |||||
| Share capital | 28,154 | 27,558 | |||
| Contributed surplus | 2,084 | 2,169 | |||
| Deficit | (5,715) | (5,667) | |||
| Total shareholders' equity | 24,523 | 24,060 | |||
| Total liabilities and shareholders' equity | $ | 28,286 | $ | 28,817 | |
| RDM CORPORATION | |||||||||
| Consolidated Statements of Operations | |||||||||
| (Amounts in Canadian Dollars, In Thousands, Except Per Share Amounts) | |||||||||
| Three months ended | Six months ended | ||||||||
| March 31 | March 31 | ||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||
| Revenue | |||||||||
| Payment Processing Services | 2,528 | 2,406 | 4,960 | 4,835 | |||||
| Digital Imaging Products | 2,918 | 2,841 | 6,770 | 6,115 | |||||
| $ | 5,446 | $ | 5,247 | $ | 11,730 | $ | 10,950 | ||
| Cost of revenue | 3,526 | 3,334 | 7,740 | 6,780 | |||||
| Gross Profit | 1,920 | 1,913 | 3,990 | 4,170 | |||||
| Operating expenses (income): | |||||||||
| Sales and marketing | 793 | 928 | 1,672 | 1,997 | |||||
| Research and development | 777 | 1,208 | 1,692 | 2,390 | |||||
| General and administration | 435 | 456 | 1,070 | 1,010 | |||||
| Depreciation and amortization | 40 | 49 | 78 | 96 | |||||
| Stock-based compensation | 60 | 58 | 120 | 133 | |||||
| Foreign exchange gain | (195) | (288) | (535) | (460) | |||||
| Interest Income | (27) | (9) | (59) | (18) | |||||
| Restructuring | - | 419 | - | 419 | |||||
| 1,883 | 2,821 | 4,038 | 5,567 | ||||||
| Income (loss) before income taxes | 37 | (908) | (48) | (1,397) | |||||
| Income tax expense | - | - | - | - | |||||
| Net income (loss) and comprehensive income (loss) | 37 | (908) | (48) | (1,397) | |||||
| Net income (loss) per share - basic and diluted | $ | 0.00 | $ | (0.04) | $ | 0.00 | $ | (0.07) | |
| RDM CORPORATION | ||||||||
| Statement of Shareholder's Equity | ||||||||
| (Amounts in Canadian Dollars, In Thousands) | ||||||||
| Share Capital |
Contributed Surplus |
Retained earnings (deficit) |
Total | |||||
| Balance as at September 30, 2009 | $ | 27,639 | $ | 1,886 | $ | (2,664) | $ | 26,861 |
| Net loss and comprehensive loss | - | - | (1,397) | (1,397) | ||||
| Repurchase of share capital | (43) | - | - | (43) | ||||
| Stock-based compensation | - | 133 | - | 133 | ||||
| Balance as at March 31, 2010 | $ | 27,596 | $ | 2,019 | $ | (4,061) | $ | 25,554 |
| Balance as at September 30, 2010 | $ | 27,558 | $ | 2,169 | $ | (5,667) | $ | 24,060 |
| Net income (loss) and comprehensive income (loss) | - | - | (48) | (48) | ||||
| Repurchase of share capital | (166) | 28 | - | (138) | ||||
| Issuance of share capital | 762 | (233) | - | 529 | ||||
| Stock-based compensation | - | 120 | - | 120 | ||||
| Balance as at March 31, 2011 | $ | 28,154 | $ | 2,084 | $ | 5,715 | $ | 24,523 |
| RDM CORPORATION | ||||||||||
| Consolidated Statements of Cash Flows | ||||||||||
| (Amounts in Canadian Dollars, In Thousands) | ||||||||||
| Three months ended | Six months ended | |||||||||
| March 31 | March 31 | |||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||
| Cash provided by (used in): Operations: |
||||||||||
| Net income (loss) Items not involving cash: |
$ | 37 | $ | (908) | $ | (48) | $ | (1,397) | ||
| Amortization of furniture and equipment | 282 | 259 | 528 | 538 | ||||||
| Amortization of intangible assets | 12 | 9 | 21 | 17 | ||||||
| Stock-based compensation | 60 | 58 | 120 | 133 | ||||||
| Change in non-cash operating working capital | 794 | 673 | 671 | 1,945 | ||||||
| Cash provided by operations | 1,185 | 91 | 1,292 | 1,236 | ||||||
| Financing: | ||||||||||
| Issuance of share capital | 14 | - | 529 | - | ||||||
| Cash provided by financing activities | 14 | - | 529 | - | ||||||
| Investing: | ||||||||||
| Repurchase of share capital | (54) | (15) | (138) | (43) | ||||||
| Purchase of furniture and equipment | (22) | (140) | (112) | (784) | ||||||
| Additions to intangible assets | (60) | (40) | (87) | (80) | ||||||
| Cash used in investing activities | (136) | (195) | (337) | (907) | ||||||
| Increase (decrease) in cash and cash equivalents | 1,063 | (104) | 1,484 | (329) | ||||||
| Cash and cash equivalents, beginning of period | 14,619 | 16,151 | 14,198 | 15,718 | ||||||
| Cash and cash equivalents, end of period | $ | 15,682 | $ | 16,047 | $ | 15,682 | $ | 16,047 | ||
| Supplementary cash flow information: | ||||||||||
| Non-cash furniture and equipment additions | ||||||||||
| included in accounts payable | $ | - | $ | 587 | $ | - | $ | - | ||
SOURCE RDM Corporation
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