Toronto Stock Exchange Symbol: RC
WATERLOO, ON, April 30 /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, 2010.
"In the second quarter we made progress on all of our key metrics - including scanner sales, ITMS end user locations, and number of channel partners - but our overall financial results were suppressed by the impact of shifting exchange rates," said Douglas Newman, President and CEO of RDM Corporation. "We are focused on achieving the right balance between managing short-term costs and ensuring we are well positioned to capitalize on what I continue to believe is a significant long-term opportunity in the remote deposit capture space."
Q2 2010 Highlights - Total revenues were $5.2 million in the second quarter of fiscal 2010, compared to $5.8 million in the second quarter of 2009. - Payment Processing Services segment revenues, which are recurring in nature, were $2.3 million in Q2 2010, compared to $2.6 million a year earlier. - Transaction volumes for RDM's Image & Transaction Management System (ITMS(R)) averaged 3.6 million items per week during the second quarter, comparable to the Q2 2009 volumes, and up from 3.5 million items per week in the first quarter of 2010. - ITMS end user locations increased from 18,100 to 18,500 during the second quarter. - RDM added four additional bank distributors and three new independent sales organizations (ISOs) during the quarter. - The Company shipped 7,500 proprietary scanners in the second quarter, compared to 4,200 a year earlier. - Gross profit was $1.9 million or 37% of revenues, compared to $2.6 million or 45% of revenues in the second quarter of 2009. - Net loss was $0.9 million or $0.04 per share in Q2 2010, consistent with the second quarter of last year. The Q2 2010 net loss included a $0.4 million restructuring charge. - Cash and equivalents were $16.1 million at March 31, 2010, compared to $16.2 million at December 31, 2009. - In April, the company announced a new generation of document scanners. RDM Connect(TM) offers, in an affordable compact check scanner, all of the features and sophistication of an expensive large batch check scanner. Financial Review Operating Results by Segment For the Three Months Ended March 31, 2010 (In thousands Payment Digital Electronic of Canadian Processing Imaging Payment Quality dollars) Services Products Solutions Assurance Total ----------------------------------------------------------- Revenue $2,319 $2,583 $87 $258 $5,247 Gross profit $952 $753 $21 $187 $1,913 Gross profit percentage 41% 29% 24% 72% 37% Operating Results by Segment For the Three Months Ended March 31, 2009 (In thousands Payment Digital Electronic of Canadian Processing Imaging Payment Quality dollars) Services Products Solutions Assurance Total ----------------------------------------------------------- Revenue $2,596 $2,435 $522 $229 $5,782 Gross profit $1,233 $926 $262 $152 $2,573 Gross profit percentage 48% 38% 50% 66% 45%
RDM generated total revenues of $5.2 million in the three months ended March 31, 2010, a decrease of $0.5 million from the second quarter of the previous year. The majority of the decrease was attributable to a $1.0 million impact from a shift in currency exchange rates over the past year, partially offset by an increase in scanner sales.
Payment Processing Services segment revenues of $2.3 million represented a decrease of $277,000 from a year earlier, as the positive impact of growth in ITMS end user locations was offset by the effect of exchange rates. Revenues in the Digital Imaging Products segment increased $148,000 to $2.6 million, driven by an increase in scanner sales, and in particular by sales of the EC7500(R) scanner. The Electronic Payments Solutions segment and the Quality Assurance segment, which represented a combined 7% of total revenues for the quarter, generated revenues of $87,000 and $258,000, respectively, compared to $522,000 and $229,000, respectively, in Q2 2009.
Gross profit of $1.9 million in Q2 2010 was down from $2.6 million in the second quarter of the previous year. Expressed as a percentage of revenues, the overall gross margin was 37%, compared to 45% a year earlier. Decreased margins were due to the impact of exchange rates.
Sales and marketing expense was $0.9 million in Q2 2010, a decrease of $0.3 million or 24% from the previous year when the Company made a significant investment in signing new channel partners and launching Simply Deposit(TM). Research and development expenses increased 10% to $1.2 million as the Company continued to invest in new product development including the RDM Connect(TM) scanner and new ITMS functionality such as accounts receivable integration. General and administration expenses increased 6% to $456,000.
Net loss was $0.9 million in the second quarter of 2010, or $0.04 per share, compared to a net loss of $0.9 million or $0.04 per share a year earlier. The Q2 2010 results include a $0.4 million restructuring charge incurred due to staffing reductions made during the quarter. Foreign exchange represented a gain of $288,000 in the second quarter of 2010 compared to a loss of $563,000 in Q2 2009.
RDM repurchased 17,000 shares during the second quarter under its Normal Course Issuer Bid. At March 31, 2010, the Company had 20.75 million common shares outstanding.
Conference Call
RDM will be hosting a conference call to discuss the Company's second quarter results on April 30, 2010 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.
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, September 30, 2010 2009 Unaudited Audited ------------------------------------------------------------------------- Assets: Current assets: Cash and cash equivalents $ 16,047 $ 15,718 Accounts receivable 4,315 4,123 Inventories 3,066 3,409 Investment tax credit receivable 1,402 1,770 Other 2,019 2,039 ------------------------------------------------------------------------- Total current assets 26,849 27,059 Furniture and equipment 3,521 3,275 Intangible assets 351 288 ------------------------------------------------------------------------- Total assets $ 30,721 $ 30,622 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Liabilities and shareholders' equity: Current liabilities: Accounts payable and accrued liabilities $ 4,526 $ 3,062 Deferred revenue 440 498 ------------------------------------------------------------------------- Total current liabilities 4,966 3,560 ------------------------------------------------------------------------- Future income tax liability 201 201 Shareholders' equity: Share capital 27,596 27,639 Contributed surplus 2,019 1,886 Retained earnings (deficit) (4,061) (2,664) ------------------------------------------------------------------------- Total shareholders' equity 25,554 26,861 ------------------------------------------------------------------------- Total liabilities and shareholders' equity $ 30,721 $ 30,622 ------------------------------------------------------------------------- ------------------------------------------------------------------------- RDM CORPORATION Consolidated Statements of Operations (Amounts in Canadian Dollars, In Thousands, Except Per Share Amounts) Three months ended Six months ended March March 2010 2009 2010 2009 (Unaudited) (Unaudited) (Unaudited) (Unaudited) ------------------------------------------------------------------------- Revenue $ 5,247 $ 5,782 $ 10,950 $ 12,870 Cost of revenue 3,334 3,209 6,780 7,341 ------------------------------------------------------------------------- Gross Profit 1,913 2,573 4,170 5,529 Operating expenses (income): Sales and marketing 928 1,221 1,997 2,646 Research and development 1,208 1,094 2,390 2,165 General and administration 456 430 1,010 916 Depreciation and amortization 49 62 96 122 Stock-based compensation 58 113 133 257 Foreign exchange loss (gain) (288) 563 (460) 2,011 Interest Income (9) (45) (18) (104) Restructuring 419 - 419 - ------------------------------------------------------------------------- 2,821 3,446 5,567 8,013 ------------------------------------------------------------------------- Loss before income taxes (908) (865) (1,397) (2,484) Income Tax expense - - - - ------------------------------------------------------------------------- Net loss and comprehensive loss (908) (865) (1,397) (2,484) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net loss per share - basic and diluted $ (0.04) $ (0.04) $ (0.07) $ (0.12) ------------------------------------------------------------------------- ------------------------------------------------------------------------- RDM CORPORATION Statement of Shareholder's Equity (Amounts in Canadian Dollars, In Thousands) ------------------------------------------------------------------------- Retained Share Contributed earnings capital surplus (deficit) Total ------------------------------------------------------------------------- Balance as at September 30, 2008 $ 28,338 $ 1,162 $ (641) $ 28,859 Net loss and comprehensive loss - - (2,484) (2,484) Repurchase of share capital - 257 - 257 Stock-based compensation - - - - ------------------------------------------------------------------------- Balance as at March 31, 2009 $ 28,005 $ 1,419 $ (3,125) $ 26,299 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- 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 ------------------------------------------------------------------------- ------------------------------------------------------------------------- RDM CORPORATION Consolidated Statements of Cash Flows (Amounts in Canadian Dollars, In Thousands) Three months ended Six months ended March March 2010 2009 2010 2009 (Unaudited) (Unaudited) (Unaudited) (Unaudited) ------------------------------------------------------------------------- Cash provided by (used in): Operations: Net loss Items not involving cash: $ (908) $ (865) $ (1,397) $ (2,484) Amortization of furniture and equipment 259 237 538 449 Amortization of intangible assets 9 11 17 23 Stock-based compensation 58 113 133 257 Future income taxes - - - (74) Change in non-cash operating working capital 673 756 1,945 2,397 ------------------------------------------------------------------------- Cash provided by operations 91 252 1,236 568 Investing: Repurchase of share capital (15) (173) (43) (333) Purchase of furniture and equipment (140) (458) (784) (732) Additions to intangible assets (40) (21) (80) (60) ------------------------------------------------------------------------- Cash used in investing activities (195) (652) (907) (1,125) Increase (decrease) in cash and cash equivalents (104) (400) 329 (557) Cash and cash equivalents, beginning of period 16,151 17,264 15,718 17,421 ------------------------------------------------------------------------- Cash and cash equivalents, end of period $ 16,047 $ 16,864 $ 16,047 $ 16,864 ------------------------------------------------------------------------- Supplementary cash flow information: Non-cash furniture and equipment additions included in accounts payable $ 587 $ - $ - $ - ------------------------------------------------------------------------- -------------------------------------------------------------------------
SOURCE RDM Corporation
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