RDM Corporation Reports First Quarter Financial Results

Toronto Stock Exchange Symbol: RC

WATERLOO, ON, Feb. 9, 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 three month period ended December 31, 2011. In accordance with reporting requirements for Canadian public issuers, RDM's results have been prepared under International Financial Reporting Standards (IFRS). All figures, including prior year comparable amounts, are now reported in U.S. dollars unless otherwise stated.

Q1 2012 Highlights

• Total revenue was $4.5 million in the first quarter of fiscal 2012, compared to $6.2 million in the first quarter of 2011 and $4.9 million in the prior quarter.
  
  
• Gross profit was $2.2 million or 49% of revenues in Q1 2012, compared to $2.1 million or 35% of revenues in Q1 2011.
  
  
• Payment Processing Services revenue was $2.7 million, an increase of 13% over Q1 2011.
  
  
• The Company added 956 new end user seats during the first quarter, an increase of 18.5% compared to Q1 2011 and 5% compared to the prior quarter.
  
  
• EBITDA was $454,000 in the first quarter of 2012 compared to $857,000 a year earlier.
  
  
• Net income was $144,000 or $0.01 per share in Q1 2012, compared to $594,000 or $0.03 per share in the first quarter of 2011.
  
  
• The Company accumulated $277,000 in cash during the quarter and ended the period with a cash balance of $15.1 million.
  

"I am pleased with the gross margin performance we are achieving in both of our product lines, as well as the year over year growth in our Payment Processing Services business," said Randy Fowlie, President and Chief Executive Officer of RDM Corporation. "This combination enabled us to deliver improved operating results. We continue to see improvements in our overall business model, despite experiencing some weakness in our hardware business."

Conference Call
RDM will be hosting a conference call to discuss the Company's first quarter results on February 9, 2012 at 9:00 a.m. EST.  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 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 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 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
Condensed Interim Consolidated Balance Sheets
(Amounts in thousands of U.S. Dollars)

(Unaudited)
					December 31, 2011		September 30,2011		October 1, 2010
Assets:
Current assets:
	Cash and cash equivalents			$	15,092	$	14,815	$	13,798
	Accounts receivable				2,871		2,799		3,522
	Inventories				3,667		3,455		3,589
	Derivative assets				-		-		278
	Investment tax credit receivable				573		520		1,354
	Prepaid and other assets				634		639		1,395
Total current assets					22,837		22,228		23,936
Investment tax credits					556		602		-
Furniture and equipment					2,290		2,455		3,457
Intangible assets					1,074		1,162		564
Total assets				$	26,757	$	26,447	$	27,957
Liabilities and shareholders' equity:
Current liabilities:
	Accounts payable and accrued liabilities			$	2,443	$	2,376	$	4,068
	Deferred revenue				299		279		360
	Derivative liabilities				-		67		-
Total current liabilities					2,742		2,722		4,428
Deferred income tax liability					-		-		195
Shareholders' equity:
	Share capital				19,960		19,960		19,371
	Contributed surplus				2,174		2,115		2,083
	Accumulated other comprehensive income				87		-		-
	Retained earnings				1,794		1,650		1,880
Total shareholders' equity					24,015		23,725		23,334
Total liabilities and shareholders' equity				$	26,757	$	26,447	$	27,957

RDM CORPORATION
Condensed Interim Consolidated Balance Sheets
(Amounts in thousands of U.S. Dollars, except per share amounts)

(Unaudited)
Three months ended December 31					2012		2011
Revenue:
	Payment Processing Services			$	2,723	$	2,400
	Digital Imaging Products				1,783		3,802
					4,506		6,202
Cost of revenue					2,293		4,065
Gross profit					2,213		2,137
Operating expenses:
	Sales and marketing				898		875
	Research and development				964		942
	General and administration				526		712
					2,388		2,529
Results from operating activities					(175)		(392)
Other items:
	Foreign exchange gain				355		954
	Interest				28		32
					383		986
Income before income taxes					208		594
Income tax expense:
	Current				64		-
	Future				-		-
					-		-
Income for the period				$	144	$	594
Income per share - basic and diluted				$	0.01	$	0.03

RDM CORPORATION
Condensed Interim Consolidated Statements of Comprehensive Income
(Amounts in thousands of U.S. Dollars)

(Unaudited)
Three months ended December 31					2012				2011
Income for the period				$	144			$	594
Other comprehensive income:
	Effective portion of changes in fair value of cash flow hedges				87				-
Comprehensive income				$	231			$	594

RDM CORPORATION
Condensed Interim Consolidated Statement of Changes in Shareholder's Equity
(Amounts in thousands of U.S. Dollars)

(Unaudited)
						Share capital				Contributed surplus				Accumulated other comprehensive income				Retained earnings				Total
Balance as at October 1, 2010					$	19,371			$	2,083			$	-			$	1,880			$	23,334
	Income and comprehensive income					-				-				-				594				594
	Repurchase of share capital					(103)				21				-				-				(82)
	Issuance of share capital					726				(218)				-				-				508
	Stock-based compensation					-				32				-				-				32
Balance as at December 31, 2010					$	19,994			$	1,918				-			$	2,474			$	24,386
Balance as at September 30, 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				-				-				59
Balance as at December 31, 2011					$	19,960			$	2,174			$	87			$	1,794			$	24,015

RDM CORPORATION
Condensed Interim Consolidated 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					$	144			$	594
	Items not involving cash:
		Depreciation of furniture and equipment				186				219
		Amortization of intangible assets				88				76
		Stock-based compensation				59				32
		Interest earned				(25)				(31)
		Exchange gains on cash held in foreign currency				(389)				(201)
Change in non-cash operating working capital						(252)				(339)
Cash provided by (used in) operations						(189)				350
Interest received						11				33
Net cash provided by (used in) operations						(178)				383
Financing:
	Issuance of share capital					-				508
	Repurchase of share capital					-				(83)
Cash provided by financing activities						-				425
Investing:
	Purchase of furniture and equipment					(21)				(82)
	Additions to intangible assets					-				(27)
Cash used in investing activities						(21)				(109)
Exchange gains on cash held in foreign currency						476				201
Increase in cash and cash equivalents						277				900
Cash and cash equivalents, beginning of period						14,815				13,798
Cash and cash equivalents, end of period					$	15,092			$	14,698

 

Randy Fowlie
CEO & President
RDM Corporation
[phone] x340 Phone
[phone] Fax
[email protected]  

Rui Malhinha
Chief Financial Officer
RDM Corporation
[phone] x284 Phone
[phone] Fax
[e-mail]