RDM Corporation Reports Fiscal 2013 Second Quarter Results

Toronto Stock Exchange Symbol: RC

Continued growth

WATERLOO, ON, April 29, 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 March 31, 2013. All figures are reported in U.S. dollars unless otherwise stated.

Q2 2013 Highlights

• Total revenue was $5.4 million in Q2 of fiscal 2013, an 8% increase compared to $5.0 million in Q2 2012.
• Payment Processing Services revenue was $3.1 million, up 10% from $2.8 million in Q2 2012.
• Revenue for Digital Imaging Products was $2.3 million, 4% above the same quarter in 2012.
• Gross profit was $2.8 million or 51% of revenues in Q2 2013 compared to $2.5 million or 50% of revenues in Q2 2012.
• During the quarter, the Company added over 1,000 new end user seats to bring its ITMS network to 30,670 seats, an increase of 16% from one year earlier.
• Adjusted EBITDA was $606,000, up 13% from $536,000 for the same period last year.
• Net income for the quarter was $191,000 or $0.01 per share, compared to $242,000 or $0.01 per share last year. Net income includes a $32,000 currency loss versus a $77,000 currency gain for Q2 of 2012.
• The Company used $545,000 in cash during the quarter and ended the period with a closing cash balance for the quarter of $18.8 million. Cash generated from operations was $190,000. The overall cash usage was due mainly to investments in IT infrastructure for capacity expansion and new product initiatives.

Six months ended March 31, 2013 Highlights

• Revenue is up 6% to $10.2 million, compared to six months ended March 31, 2012.
• Gross Margin is up 54% from 50% for six months ended March 31, 2012.
• Adjusted EBITDA is up from $694,000 to $1.2 million.
• Net income of $383,000 compared to $386,000 for six months ended March 31, 2012. Net income includes exchange losses of $71,000 while the six months ended March 31, 2012 includes exchange gains of $432,000.

Randy Fowlie, President and CEO of RDM, stated, "We are very pleased with the continued growth of the Company.  Furthermore, we recorded our sixth consecutive profitable quarter. Although up a modest 4% compared to Q2 of 2011, we saw a strong recovery for our Digital Imaging Products line compared to Q1 of this year, with revenues up 35%. ITMS revenues continue to grow strongly, up nearly 10% year over year. It is clear that the strategic and operational changes we have implemented over the past two years are starting to take effect, reflected in a much more sustainable business model."

Conference Call

RDM will be hosting a conference call to discuss the Company's second quarter results on April 29, 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.

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)
			March 31, 2013			September 30,2012
Assets:
Current assets:
	Cash and cash equivalents		$	18,821		$	18,897
	Accounts receivable			3,859			3,094
	Inventories			2,872			2,469
	Investment tax credit receivable			163			336
	Prepaid and other assets			621			569
	Derivative assets			-			63
Total current assets				26,336			25,428
Investment tax credits				364			453
Property and equipment				2,588			1,951
Intangible assets				639			860
Total assets			$	29,927		$	28,692
Liabilities and shareholders' equity:
Current liabilities:
	Accounts payable and accrued liabilities		$	3,284		$	2,577
	Deferred revenue			413			275
	Derivative liabilities			17			-
Total current liabilities				3,714			2,852
Shareholders' equity:
	Share capital			20,007			19,960
	Contributed surplus			2,398			2,323
	Accumulated other comprehensive income (loss)			(17)			116
Retained earnings				3,825			3,441
Total shareholders' equity				26,213			25,840
Contingencies
Total liabilities and shareholders' equity			$	29,927		$	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 March 31						Six months ended March 31
		2013			2012			2013			2012
Revenue:
Payment Processing Services		$	3,109		$	2,836		$	6,218		$	5,559
Digital Imaging Products			2,293			2,211			3,951			3,994
			5,402			5,047			10,169			9,553
Cost of revenue			2,622			2,531			4,640			4,823
Gross profit			2,780			2,516			5,529			4,730
Operating expenses:
	Sales and marketing		766			802			1,607			1,700
	Research and development		1,147			981			2,242			1,945
	General and administration		615			531			1,170			1,058
			2,528			2,314			5,019			4,703
Results from operating activities			252			202			510			27
Other items:
	Foreign exchange gain (loss)		(32)			77			(71)			432
	Interest		8			24			20			53
			(24)			101			(51)			485
Income before income taxes			228			303			459			512
Current income tax expense			37			61			75			125
Income for the period		$	191		$	242		$	384		$	387
Income per share - basic and diluted		$	0.01		$	0.01		$	0.02		$	0.02

RDM CORPORATION Condensed Consolidated Interim Statements of Comprehensive Income (Amounts in thousands of U.S. Dollars)
(Unaudited)
		Three months ended March 31						Six months ended March 31
		2013			2012			2013			2012
Income for the period		$	191		$	242		$	384		$	387
Other comprehensive income:
	Effective portion of changes in fair value of cash flow hedges		(64)			81			(133)			168
Comprehensive income		$	127		$	323		$	251		$	555

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			-			-			-			387			387
	Effective portion of changes in  fair value of cash flow hedges			-			-			168			-			168
				19,960			2,115			168			387			555
Stock-based compensation				-			108			-			-			108
Balance as at March 31, 2012		$		19,960		$	2,223		$	168		$	2,037		$	24,388
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			-			-			-			384			384
	Issuance of share capital			47			(9)			-			-			38
	Effective portion of changes in  fair value of cash flow hedges			-			-			(133)			-			(133)
				20,007			2,314			(17)			3,825			26,129
Stock-based compensation				-			84			-			-			84
Balance as at March 31, 2013		$		20,007		$	2,398		$	(17)		$	3,825		$	26,213

RDM CORPORATION Condensed Consolidated Interim Statements of Cash Flows (Amounts in thousands of U.S. Dollars)
(Unaudited)
				Six months ended March 31
				2013			2012
Cash provided by (used in):
Operations:
Income for the period				$	384		$	387
	Items not involving cash:
		Depreciation of furniture and equipment			334			381
		Amortization of intangible assets			237			178
		Stock-based compensation			84			108
		Interest earned			(20)			(53)
		Exchange gains on cash held in foreign currency			(178)			(150)
Change in non-cash operating working capital					(33)			(125)
Cash provided by operations					808			726
Interest received					24			79
Net cash provided by operations					832			805
Financing:
		Issuance of share capital			38			-
		Repurchase of share capital			-			-
Cash provided by financing activities					38			-
Investing:
		Purchase of furniture and equipment			(971)			(244)
		Additions to intangible assets			(16)			(36)
Cash used in investing activities					(987)			(280)
Exchange gains on cash held in foreign currency					41			292
Increase (decrease) in cash and cash equivalents					(76)			817
Cash and cash equivalents, beginning of period					18,897			14,815
Cash and cash equivalents, end of period				$	18,821		$	15,632

 

 

 

 

SOURCE: RDM Corporation

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

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