RDM Corporation Reports Fiscal 2013 Third Quarter Results

Solid Growth for Payment Processing and Digital Imaging

WATERLOO, ON, July 25, 2013 /CNW/ - RDM Corporation (TSX:RC), a leader in remote deposit capture (RDC) solutions, today reported its financial results for the three month period ended June 30, 2013. All figures are reported in U.S. dollars unless otherwise stated.

Q3 2013 Highlights

• Total revenue was $6.1 million in Q3 of fiscal 2013, a 17% increase compared to $5.2 million in Q3 2012, and a 12% increase compared to Q2 2013.
• Payment Processing Services revenue was $3.5 million, up 17% from $3.0 million in Q3 2012.
• Revenue for Digital Imaging Products was $2.6 million, 14% above the same quarter in 2012.
• Gross profit was $3.2 million or 53% of revenues in Q3 2013, compared to $2.7 million, or 53% of revenues in Q3 2012.
• The Company ended the quarter with 30,950 end user seats, an increase of 13% from one year earlier.
• Adjusted EBITDA was $1.1 million, up 60% from $713,000 for the same period last year.
• Operating income for the quarter was $744,000, up 103%, compared to $366,000 for the same period in 2012.
• The Company recorded one-time charges of $2.2 million to reflect a litigation settlement, including a $1.4 million cash payment made during the quarter.
• The net loss for the quarter was $1.5 million, or ($0.07) per share, compared to net income of $728,000, or $0.03 per share last year. Despite a $1.4 million settlement-related cash payment, the Company generated $373,000 in cash during the quarter and ended the period with a closing cash balance of $19.2 million.

Nine months ended June 30, 2013 Highlights

• Revenue is up 10% to $16.3 million, compared to the nine months ended June 30, 2012, driven both by Payment Processing Services (up 14%) and Digital Imaging (up 4%).
• Gross Margin is up to 54% from 51% for the nine months ended June 30, 2012.
• Operating income is up 255% to $1.4 million, driven by revenue growth and relatively stable operating expenses.
• Adjusted EBITDA for the nine months ended June 30, 2013 is $2.5 million compared to $1.4 million in the same period in 2012.
• The one-time charge of $2.2 million related to settlement of litigation resulted in a net loss of $1.2 million, compared to net income of $1.1 million for the same period last year.

"We are very pleased with our results this quarter." said Randy Fowlie, President and CEO of RDM.  "Revenue is up 17% over the prior year driven by strong market acceptance of both our Payment Processing Services and Digital Imaging businesses. In addition, operating income was $744,000, up 103% over the prior year. The litigation with PPS Data was settled this quarter. Excluding the $1.42 million cash payment related to the litigation, we generated $1.8 million in cash from operations. We are well positioned to take advantage of growth opportunities in the future."

Conference Call
RDM will be hosting a conference call to discuss the Company's second quarter results on July 25, 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 a provider of Remote Deposit Capture (RDC), integrated receivables and payment processing solutions designed to help clients simplify the way they do business.  RDM processes over $600 billion in annual payments and helps corporations and financial institutions increase revenue, expand marketshare and improve customer service for over 30,000 end-users.  Our solutions are utilized at 5 of the top 10 financial institutions in the United States and serve 32% of the top 100 Fortune 500 companies including brokerage firms, big box retailers, healthcare and insurance providers, and government entities.

For over twenty five years, RDM has worked with clients to provide both software and hardware solutions including transactional data management, web-based and mobile RDC for large corporate clients and small businesses, 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. To learn more visit 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)

(Not audited or reviewed by the Company's external auditor)
					June 30, 2013			September 30,2012
Assets:
Current assets:
	Cash and cash equivalents			$	19,194		$	18,897
	Accounts receivable				2,639			3,094
	Inventories				2,967			2,469
	Investment tax credit receivable				111			336
	Prepaid and other assets				737			569
	Derivative assets				-			63
Total current assets					25,648			25,428
Investment tax credits					316			453
Property and equipment					2,442			1,951
Intangible assets					505			860
Total assets				$	28,911		$	28,692
Liabilities and shareholders' equity:
Current liabilities:
	Accounts payable and accrued liabilities			$	3,788		$	2,577
		Deferred revenue			354			275
		Derivative liabilities			44			-
Total current liabilities					4,186			2,852
Shareholders' equity:
	Share capital				20,065			19,960
	Contributed surplus				2,419			2,323
	Accumulated other comprehensive income (loss)				(44)			116
	Retained earnings				2,285			3,441
Total shareholders' equity					24,725			25,840
Total liabilities and shareholders' equity				$	28,911		$	28,692

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

(Not audited or reviewed by the Company's external auditor)
				Three months ended June 30				Nine months ended June 30
				2013			2012			2013			2012
Revenue:
	Payment Processing Services		$	3,526		$	2,957		$	9,744		$	8,516
	Digital Imaging Products			2,559			2,241			6,510			6,235
				6,085			5,198			16,254			14,751
Cost of revenue				2,847			2,454			7,487			7,277
Gross profit				3,238			2,744			8,767			7,474
Operating expenses:
	Sales and marketing			858			859			2,465			2,559
	Research and development			1,072			1,003			3,314			2,948
	General and administration			564			516			1,588			1,573
				2,494			2,378			7,367			7,080
Results from operating activities				744			366			1,400			394
Other items:
	Foreign exchange gain (loss)			(13)			(66)			(84)			366
	Interest			9			25			29			77
	Other income (expense)			(2,243)			463			(2,389)			463
				(2,247)			422			(2,444)			906
Income (loss) before income taxes				(1,503)			788			(1,044)			1,300
Current income tax expense				37			60			112			185
Income (loss) for the period			$	(1,540)		$	728		$	(1,156)		$	1,115
Income (loss) per share - basic and  diluted			$	(0.07)		$	0.03		$	(0.05)		$	0.05

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

(Not audited or reviewed by the Company's external auditor)
			Three months ended June 30					Nine months ended June 30
				2013		2012		2013		2012
Income (loss) for the period			$	(1,540)	$	728	$	(1,156)	$	1,115
Other comprehensive income:
	Effective portion of changes in fair value of cash        flow hedges			(27)		(144)		(160)		24
Comprehensive income (loss)			$	(1,567)	$	584	$	(1,316)	$	1,139

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

(Not audited or reviewed by the Company's external auditor)
					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			-				-			-				1,115				1,115
		Effective portion of changes in fair value of cash flow hedges			-				-			24				-				24
					19,960				2,115			24				1,115				1,139
	Stock-based compensation				-				156			-				-				156
Balance as at June 30, 2012				$	19,960		$		2,271		$	24		$		2,765		$		25,020
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			-				-			-				(1,156)				(1,156)
		Issuance of share capital			105				(19)			-				-				86
		Effective portion of changes in fair value of cash flow hedges			-				-			(160)				-				(160)
					20,065				2,304			(44)				2,285				24,610
	Stock-based compensation				-				115			-				-				115
Balance as at June 30, 2013				$	20,065		$		2,419		$	(44)		$		2,285		$		24,725

  

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

(Not audited or reviewed by the Company's external auditor)
						Nine months ended June 30
						2013				2012
Cash provided by (used in):
Operations:
Income (loss) for the period				$		(1,156)		$		1,115
	Items not involving cash:
		Depreciation of furniture and equipment				558				591
		Amortization of intangible assets				380				268
		Stock-based compensation Interest earned Exchange gains on cash held in foreign currency				115 (29)  (218)				156 (77) (453)
Change in non-cash operating working capital						1,548				202
Cash provided by operations						1,198				1,802
Interest received						33				119
Net cash provided by operations						1,231				1,921
Financing:
	Issuance of share capital					86				-
Cash provided by financing activities						86				-
Investing:
	Purchase of furniture and equipment					(1,049)				(245)
	Additions to intangible assets					(25)				(45)
Cash used in investing activities						(1,074)				(290)
Exchange gains on cash held in foreign currency						54				435
Increase in cash and cash equivalents						297				2,066
Cash and cash equivalents, beginning of period						18,897				14,815
Cash and cash equivalents, end of period				$		19,194		$		16,881

 

SOURCE: RDM Corporation

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

Rui Malhinha
RDM Corporation
[phone] x284
[email protected]