RDM Corporation Reports Fiscal 2013 First Quarter Results

Growth in Payment Processing Drives Higher Margins

Toronto Stock Exchange Symbol: RC

WATERLOO, 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 Highlights

• Total 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 Call
RDM 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 www.rdmcorp.com. Detailed financial results and Management's Discussion and Analysis will be filed on www.sedar.com.

Non-IFRS Measures
Adjusted 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 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 Consolidated Interim Balance Sheets
(Amounts in thousands of U.S. Dollars)

(Unaudited)

		December 31, 2012		September 30, 2012
Assets:
Current assets:
	Cash and cash equivalents	$	19,366	$	18,897
	Accounts receivable	2,812		3,094
	Inventories	2,930		2,469
	Investment tax credit receivable	150		336
	Prepaid and other assets	636		569
	Derivative assets	47		63
Total current assets		25,941		25,428
Investment tax credits		409		453
Property and equipment		2,030		1,951
Intangible assets		742		860
Total assets		$	29,122	$	28,692
Liabilities and shareholders' equity:
Current liabilities:
	Accounts payable and accrued liabilities	$	2,816	$	2,577
	Deferred revenue	282		275
Total current liabilities		3,098		2,852
Shareholders' equity:
	Share capital	19,979		19,960
	Contributed surplus	2,365		2,323
	Accumulated other comprehensive income	47		116
	Retained earnings	3,633		3,441
Total shareholders' equity		26,024		25,840
Contingencies
Total liabilities and shareholders' equity		$	29,122	$	28,692

RDM CORPORATION
Condensed Consolidated Interim Statements of Income
(Amounts in thousands of U.S. Dollars, except per share data)

(Unaudited)

Three months ended December 31		2012		2011
Revenue:
	Payment Processing Services	$	3,108	$	2,723
	Digital Imaging Products	1,659		1,783
		4,767		4,506
Cost of revenue		2,018		2,293
Gross 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		208
Current income tax expense		38		64
Income for the period		$	192	$	144
Income per share  - basic and diluted		$	0.01	$	0.01

RDM CORPORATION
Condensed 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)		87
Comprehensive income		$	123	$	231

 

RDM CORPORATION
Condensed Consolidated Interim Statements 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, 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
Balance 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		-		-		46
Balance as at December 31, 2012			$	19,979	$	2,365	$	47	$	3,633	$	26,024

RDM CORPORATION
Condensed 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		11
Net 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		476
Increase in cash and cash equivalents			469		277
Cash and cash equivalents, beginning of period			18,897		14,815
Cash and cash equivalents, end of period			$	19,366	$	15,092

  

 

SOURCE: RDM Corporation

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

Rui Malhinha
Chief Financial Officer
RDM Corporation
[phone] x284
[email protected]