RDM Corporation Reports Fiscal 2013 Fourth Quarter and Year-End Financial Results
Payment processing drives growth
WATERLOO, ON, Nov. 21, 2013 /CNW/ - RDM Corporation (TSX: RC), a leader in remote deposit capture (RDC) solutions, today reported its financial results for the year and three-month period ended September 30, 2013. All figures are reported in U.S. dollars unless otherwise stated.
Year ended September 30, 2013 Highlights
- Revenue increased 7% to $21.9 million, compared to the prior year, driven by a 12% revenue increase from Payment Processing Services. Digital Imaging revenue remained consistent at $8.8 million.
- Gross margin increased to 53.2% from 50.9% in fiscal 2012.
- Operating income grew by 135% to $2.0 million, driven by solid growth of higher margin recurring revenue and relatively stable operating expenses.
- A net loss of $519,000 was recorded, primarily attributable to $2.3 million in legal settlement expenses, as well as a $0.2 million foreign exchange loss. Prior year's $1.8 million net profit included a $0.5 million foreign exchange gain and $0.5 million in other income.
- Adjusted EBITDA was up 53% to $3.6 million, as compared to $2.3 million in 2012.
Q4 2013 Highlights
- Total revenue was $5.6 million compared to $5.7 million in Q4 of 2012.
- Payment Processing Services revenue increased by 7% to $3.3 million compared to last year, driven primarily by an increase in ITMS end-user seats. The Company added 1,071 new seats during the quarter to bring its ITMS network to 32,021 seats, up 12% from one year earlier and up 3.5% compared to Q3 2013.
- Digital Imaging revenue was $2.3 million, as compared to $2.6 million last year.
- Adjusted EBITDA increased by 33% to $1.1 million and operating income was up 32% to $0.6 million.
- The Company generated $0.9 million in cash during the quarter and ended the period with a cash balance of $20.1 million.
"Overall, I am pleased with our results this year with both revenue and profitability increasing over the prior year," stated Randy Fowlie, President and CEO of RDM. "RDM achieved solid organic growth of 12% in our recurring revenue business as we see continued acceptance of our products in the marketplace. We increased end-user seats by 3,500 to end the year with over 32,000. Fiscal 2013 results also demonstrated that our operations are continuing to improve with income from operations increasing 135% to $2 million. In addition, we strengthened our balance sheet by increasing our cash position to $20 million. This provides us the opportunity to make investments where necessary to continue to grow the business."
Conference Call
RDM will be hosting a conference call to discuss the Company's fourth quarter results on November 21, 2013 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 ("MD&A") 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. A reconciliation of Adjusted EBITDA to net income determined in accordance with IFRS is provided in the Company's MD&A and in the accompanying schedule.
About RDM Corporation
RDM Corporation (www.rdmcorp.com) is a leading provider of remote deposit capture (RDC) and complex desktop remittance processing solutions designed to help clients simplify the way they do business. Five of the top ten financial institutions in the United States use RDM's payment processing solutions. RDM processes over $600 billion in payments annually and helps corporations and financial institutions increase revenue, expand market share and improve customer service for over 30,000 end-users. RDM serves 32 percent of the top 100 Fortune 500 companies including brokerage firms, big box retailers, healthcare and insurance providers, and government entities.
For over 25 years, RDM has worked with clients to provide both software and hardware solutions including web-based and mobile RDC for large corporate clients and small businesses, transactional data management, and manufactures a wide range of digital imaging scanners. RDM was recently named to the Branham300 list, which highlights the top Canadian and multinational companies servicing the Information and Communication Technology (ICT) marketplace.
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 thousands of U.S. Dollars) |
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September 30, 2013 | September 30, 2012 | ||||||||||||
Assets: | |||||||||||||
Current assets: | |||||||||||||
Cash and cash equivalents | $ | 20,126 | $ | 18,897 | |||||||||
Accounts receivable | 2,715 | 3,094 | |||||||||||
Inventories | 2,755 | 2,469 | |||||||||||
Investment tax credit receivable | 177 | 336 | |||||||||||
Prepaid and other assets | 760 | 569 | |||||||||||
Derivative assets | 29 | 63 | |||||||||||
Total current assets | 26,562 | 25,428 | |||||||||||
Investment tax credits | 366 | 453 | |||||||||||
Property and equipment | 1,986 | 1,951 | |||||||||||
Intangible assets | 582 | 860 | |||||||||||
Total assets | $ | 29,496 | $ | 28,692 | |||||||||
Liabilities and shareholders' equity: | |||||||||||||
Current liabilities: | |||||||||||||
Accounts payable and accrued liabilities | $ | 3,663 | $ | 2,577 | |||||||||
Deferred revenue | 337 | 275 | |||||||||||
Total current liabilities | 4,000 | 2,852 | |||||||||||
Shareholders' equity: | |||||||||||||
Share capital | 20,100 | 19,960 | |||||||||||
Contributed surplus | 2,445 | 2,323 | |||||||||||
Accumulated other comprehensive income | 29 | 116 | |||||||||||
Retained earnings | 2,922 | 3,441 | |||||||||||
Total shareholders' equity | 25,496 | 25,840 | |||||||||||
Total liabilities and shareholders' equity | $ | 29,496 | $ | 28,692 | |||||||||
RDM CORPORATION Consolidated Statements of Income (Amounts in thousands of U.S. Dollars, except per share data) |
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Three months ended September 30 |
Years ended September 30 |
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2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||
Payment Processing Services | $ | 3,338 | $ | 3,131 | $ | 13,082 | $ | 11,647 | ||||||||||||||||||||||
Digital Imaging Products | 2,278 | 2,558 | 8,788 | 8,793 | ||||||||||||||||||||||||||
5,616 | 5,689 | 21,870 | 20,440 | |||||||||||||||||||||||||||
Cost of revenue | 2,751 | 2,763 | 10,238 | 10,040 | ||||||||||||||||||||||||||
Gross profit | 2,865 | 2,926 | 11,632 | 10,400 | ||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||
Sales and marketing | 788 | 854 | 3,253 | 3,413 | ||||||||||||||||||||||||||
Research and development | 956 | 1,108 | 4,270 | 4,056 | ||||||||||||||||||||||||||
General and administration | 509 | 502 | 2,097 | 2,075 | ||||||||||||||||||||||||||
2,253 | 2,464 | 9,620 | 9,544 | |||||||||||||||||||||||||||
Results from operating activities | 612 | 462 | 2,012 | 856 | ||||||||||||||||||||||||||
Other items: | ||||||||||||||||||||||||||||||
Foreign exchange gain (loss) | (101) | 134 | (185) | 501 | ||||||||||||||||||||||||||
Interest | 9 | 13 | 38 | 90 | ||||||||||||||||||||||||||
Other income (expense) | 91 | 65 | (2,298) | 528 | ||||||||||||||||||||||||||
(1) | 212 | (2,445) | 1,119 | |||||||||||||||||||||||||||
Income (loss) before income taxes | 611 | 674 | (433) | 1,975 | ||||||||||||||||||||||||||
Current income tax expense (recovery) | (26) | - | 86 | 184 | ||||||||||||||||||||||||||
Income (loss) for the period | $ | 637 | $ | 674 | $ | (519) | $ | 1,791 | ||||||||||||||||||||||
Income (loss) per share - basic and diluted | $ | 0.03 | $ | 0.03 | $ | (0.02) | $ | 0.08 | ||||||||||||||||||||||
RDM CORPORATION Consolidated Statements of Comprehensive Income (Amounts in thousands of U.S. Dollars) |
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Three months ended September 30 |
Years ended September 30 |
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2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||||
Income (loss) for the period | $ | 637 | $ | 674 | $ | (519) | $ | 1,791 | |||||||||||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||||||||||
Effective portion of changes in fair value of cash flow hedges | 73 | 92 | (87) | 116 | |||||||||||||||||||||||||||
Comprehensive income (loss) | $ | 710 | $ | 766 | $ | (606) | $ | 1,907 | |||||||||||||||||||||||
RDM CORPORATION Consolidated Statements of Changes in Shareholders' Equity (Amounts in thousands of U.S. Dollars) |
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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 | - | - | - | 1,791 | 1,791 | |||||||||||||||||||||||
Effective portion of changes in fair value of cash flow hedges |
- | - | 116 | - | 116 | |||||||||||||||||||||||
19,960 | 2,115 | 116 | 1,791 | 1,907 | ||||||||||||||||||||||||
Stock-based compensation | - | 208 | - | - | 208 | |||||||||||||||||||||||
Balance as at September 30, 2012 | $ | 19,960 | $ | 2,323 | $ | 116 | $ | 3,441 | $ | 25,840 | ||||||||||||||||||
Total comprehensive income for the period: | ||||||||||||||||||||||||||||
Loss for the period | - | - | - | (519) | (519) | |||||||||||||||||||||||
Issuance of share capital | 140 | (20) | - | - | 120 | |||||||||||||||||||||||
Effective portion of changes in fair value of cash flow hedges |
- | - | (87) | - | (87) | |||||||||||||||||||||||
140 | (20) | (87) | (519) | (486) | ||||||||||||||||||||||||
Stock-based compensation | - | 142 | - | - | 142 | |||||||||||||||||||||||
Balance as at September 30, 2013 | $ | 20,100 | $ | 2,445 | $ | 29 | $ | 2,922 | $ | 25,496 | ||||||||||||||||||
RDM CORPORATION Consolidated Statements of Cash Flows (Amounts in thousands of U.S. Dollars) |
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Three months ended September 30 |
Years ended September 30 |
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2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||
Cash provided by (used in): | |||||||||||||||||||||||||||
Operations: | |||||||||||||||||||||||||||
Income (loss) for the period | $ | 637 | $ | 674 | $ | (519) | $ | 1,791 | |||||||||||||||||||
Items not involving cash: | |||||||||||||||||||||||||||
Current income tax expense (recovery) | (26) | - | 86 | 184 | |||||||||||||||||||||||
Depreciation of furniture and equipment | 337 | 218 | 895 | 809 | |||||||||||||||||||||||
Amortization of intangible assets | 136 | 101 | 516 | 369 | |||||||||||||||||||||||
Stock-based compensation |
27 |
52 |
142 |
208 |
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Interest earned | (9) | (13) | (38) | (90) | |||||||||||||||||||||||
Exchange loss (gain) on cash held in foreign currency | 116 | 246 | (102) | (209) | |||||||||||||||||||||||
Change in non-cash operating working capital | (226) | 959 | 1,210 | 977 | |||||||||||||||||||||||
Cash provided by operations | 992 | 2,237 | 2,190 | 4,039 | |||||||||||||||||||||||
Interest received | 10 | 27 | 43 | 146 | |||||||||||||||||||||||
Net cash provided by operations | 1,002 | 2,264 | 2,233 | 4,185 | |||||||||||||||||||||||
Financing: | |||||||||||||||||||||||||||
Issuance of share capital | 34 | - | 120 | - | |||||||||||||||||||||||
Cash provided by financing activities | 34 | - | 120 | - | |||||||||||||||||||||||
Investing: | |||||||||||||||||||||||||||
Purchase of furniture and equipment | 119 | (60) | (930) | (305) | |||||||||||||||||||||||
Additions to intangible assets | (213) | (22) | (238) | (67) | |||||||||||||||||||||||
Cash used in investing activities | (94) | (82) | (1,168) | (372) | |||||||||||||||||||||||
Exchange gain (loss) on cash held in foreign currency | (10) | (166) | 44 | 269 | |||||||||||||||||||||||
Increase in cash and cash equivalents | 932 | 2,016 | 1,229 | 4,082 | |||||||||||||||||||||||
Cash and cash equivalents, beginning of period | 19,194 | 16,881 | 18,897 | 14,815 | |||||||||||||||||||||||
Cash and cash equivalents, end of period | $ | 20,126 | $ | 18,897 | $ | 20,126 | $ | 18,897 | |||||||||||||||||||
SCHEDULE | ||||||||||||||||||||||||||||
RDM CORPORATION Reconciliation of Adjusted EBITDA to Income (loss) for the period (Amounts in thousands of U.S. Dollars) |
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Three months ended September 30 |
Years ended September 30 |
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2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||||
Net Income (loss) for the period | $ | 637 | $ | 674 | $ | (519) | $ | 1,791 | ||||||||||||||||||||
Income tax expense (recovery) | (26) | - | 86 | 184 | ||||||||||||||||||||||||
Interest Income | (9) | (13) | (38) | (90) | ||||||||||||||||||||||||
Depreciation and amortization | 473 | 319 | 1,411 | 1,178 | ||||||||||||||||||||||||
Foreign exchange (gain) loss | 101 | (134) | 185 | (501) | ||||||||||||||||||||||||
Stock-based compensation | 27 | 53 | 142 | 207 | ||||||||||||||||||||||||
Other expense (income) | (91) | (65) | 2,298 | (528) | ||||||||||||||||||||||||
Adjusted EBITDA for the period | $ | 1,112 | $ | 834 | $ | 3,565 | $ | 2,241 | ||||||||||||||||||||
SOURCE: RDM Corporation
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Randy Fowlie
President & CEO
RDM Corporation
(519) 746-8483 x340
[email protected]
Rui Malhinha
Chief Financial Officer
RDM Corporation
(519) 746-8483 x284
[email protected]
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