RDM Corporation Reports Third Quarter Financial Results
Toronto Stock Exchange Symbol: RC
WATERLOO, ON, July 29, 2011 /PRNewswire/ - 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 June 30, 2011. All figures are reported in Canadian dollars unless otherwise stated.
Q3 2011 Highlights
- Total revenue was $4.6 million in the third quarter of fiscal 2011, compared to $4.8 million in the third quarter of 2010. Excluding the effect of exchange, revenue would have increased 4% over the prior year quarter.
- Payment Processing Services revenue of $2.5 million was up $0.1 million over Q3 2010.
- Digital Imaging Products revenue of $2.1 million was down $0.2 million from Q3 2010.
- Gross profit was $1.9 million or 41% of revenues in the third quarter of 2011, compared to $1.8 million or 37% of revenues in the third quarter of 2010.
- End user locations of our Payment Processing Services increased from 19,891 to 20,776 seats during the third quarter, and compares to 18,500 in the third quarter of the prior year.
- Net income was $26,000 or $0.00 per share, compared to a net loss of $1,049,000 or $(0.05) per share in Q3 2010.
- Cash and equivalents were $14.7 million at June 30, 2011.
"We continued to make progress towards our priority of returning the company to profitability," said Randy Fowlie, President and Chief Executive Officer of RDM Corporation. "Our gross profit percentage has improved and we have reduced our operating expenses compared to last year, resulting in a bottom line improvement in excess of $1 million for the quarter. We also expanded our recurring revenue base this quarter with the addition of 885 end users to our payment processing network, a growth rate of 7% over the previous quarter."
Conference Call
RDM will be hosting a conference call to discuss the Company's third quarter results on July 29, 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.
Normal Course Issuer Bid
The Company's current Normal Course Issuer Bid expires on August 8, 2011. RDM's Board of Directors has approved a new Normal Course Issuer Bid. The Bid is subject to regulatory approval.
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) |
||
| June 30, 2011 Unaudited |
September 30, 2010 Audited |
|
| Assets: | ||
| Current assets: | ||
| Cash and cash equivalents | $ 14,705 | $ 14,198 |
| Accounts receivable | 2,997 | 3,539 |
| Inventories | 3,330 | 3,821 |
| Investment tax credit receivable | 1,516 | 1,393 |
| Prepaid and other | 1,828 | 1,921 |
| Total current assets | 24,376 | 24,872 |
| Furniture and equipment | 2,968 | 3,552 |
| Intangible assets | 475 | 393 |
| Total assets | $ 27,819 | $ 28,817 |
| Liabilities and shareholders' equity: | ||
| Current liabilities: | ||
| Accounts payable and accrued liabilities | $ 2,706 | $ 4,186 |
| Deferred revenue | 303 | 370 |
| Total current liabilities | 3,009 | 4,556 |
| Future income tax liability | 201 | 201 |
| Shareholders' equity: | ||
| Share capital | 28,154 | 27,558 |
| Contributed surplus | 2,144 | 2,169 |
| Deficit | (5,689) | (5,667) |
| Total shareholders' equity | 24,609 | 24,060 |
| Total liabilities and shareholders' equity | $ 27,819 | $ 28,817 |
| RDM CORPORATION | ||||||||
| Consolidated Statements of Operations | ||||||||
| (Amounts in Canadian Dollars, In Thousands, Except Per Share Amounts) | ||||||||
| Three months ended | Nine months ended | |||||||
| June | June | |||||||
| 2011 | 2010 | 2011 | 2010 | |||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||
| Revenue | ||||||||
| Payment Processing Services | 2,499 | 2,441 | 7,459 | 7,254 | ||||
| Digital Imaging Products | 2,142 | 2,310 | 8,912 | 8,447 | ||||
| $ 4,641 | $ 4,751 | $ 16,371 | $ 15,701 | |||||
| Cost of revenue | 2,721 | 2,999 | 10,461 | 9,780 | ||||
| Gross Profit | 1,920 | 1,752 | 5,910 | 5,921 | ||||
| Operating expenses (income): | ||||||||
| Sales and marketing | 744 | 941 | 2,416 | 2,938 | ||||
| Research and development | 805 | 976 | 2.497 | 3,366 | ||||
| General and administration | 330 | 415 | 1,400 | 1,425 | ||||
| Depreciation and amortization | 41 | 51 | 119 | 147 | ||||
| Stock-based compensation | 60 | 65 | 180 | 198 | ||||
| Foreign exchange | (59) | 365 | (594) | (96) | ||||
| Interest Income | (27) | (12) | (86) | (30) | ||||
| Restructuring | - | - | - | 419 | ||||
| 1,894 | 2,801 | 5,932 | 8,367 | |||||
| Income (loss) before income taxes | 26 | (1,049) | (22) | (2,446) | ||||
| Income tax expense | - | - | - | - | ||||
| Net income (loss) and comprehensive income (loss) | 26 | (1,049) | (22) | (2,446) | ||||
| Net income (loss) per share - basic and diluted | $ 0.00 | $ (0.05) | $ 0.00 | $ (0.12) | ||||
| 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 | - | - | (2,446) | (2,446) |
| Repurchase of share capital | (47) | - | - | (47) |
| Stock-based compensation | - | 198 | - | 198 |
| Balance as at June 30, 2010 | $ 27,592 | $ 2,084 | $ (5,110) | $ 24,566 |
| Balance as at September 30, 2010 | $ 27,558 | $ 2,169 | $ (5,667) | $ 24,060 |
| Net income (loss) and comprehensive income (loss) | - | - | (22) | (22) |
| Repurchase of share capital | (166) | 28 | - | (138) |
| Issuance of share capital | 762 | (233) | - | 529 |
| Stock-based compensation | - | 180 | - | 180 |
| Balance as at June 30, 2011 | $ 28,154 | $ 2,144 | $ (5,689) | $ 24,609 |
| RDM CORPORATION | |||||||||||||
| Consolidated Statements of Cash Flows | |||||||||||||
| (Amounts in Canadian Dollars, In Thousands) | |||||||||||||
| Three months ended | Nine months ended | ||||||||||||
| June | June | ||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
| Cash provided by (used in): | |||||||||||||
| Operations: | |||||||||||||
| Net income (loss) |
$ 26 | $ (1,049) | $ (22) | $ (2,446) | |||||||||
| Items not involving cash: | |||||||||||||
| Amortization of furniture and equipment | 179 | 319 | 707 | 857 | |||||||||
| Amortization of intangible assets | 12 | 10 | 33 | 27 | |||||||||
| Stock-based compensation | 60 | 65 | 180 | 198 | |||||||||
| Change in non-cash operating working capital | (1,214) | 77 | (544) | 1,435 | |||||||||
| Cash provided by operations | (937) | (578) | 354 | 71 | |||||||||
| Financing: | |||||||||||||
| Issuance of share capital | - | - | 529 | - | |||||||||
| Cash provided by financing activities | - | - | 529 | - | |||||||||
| Investing: | |||||||||||||
| Repurchase of share capital | - | (4) | (138) | (47) | |||||||||
| Purchase of furniture and equipment | (11) | (228) | (123) | (425) | |||||||||
| Additions to intangible assets | (29) | (41) | (115) | (121) | |||||||||
| Cash used in investing activities | (40) | (273) | (376) | (593) | |||||||||
| Increase (decrease) in cash and cash equivalents | (977) | (851) | 507 | (522) | |||||||||
| Cash and cash equivalents, beginning of period | 15,682 | 16,047 | 14,198 | 15,718 | |||||||||
| Cash and cash equivalents, end of period | $ 14,705 | $ 15,196 | $ 14,705 | $ 15,196 | |||||||||
| Supplementary cash flow information: Non-cash furniture and equipment additions included in accounts payable |
$ - | $ 587 | $ - | $ 587 | |||||||||
SOURCE RDM Corporation
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