RDM Corporation Reports Fiscal 2015 First Quarter Financial Results

Company increases Adjusted EBITDA 30% year-over-year and increases dividend 50%

WATERLOO, ON, Jan. 29, 2015 /CNW/ - RDM Corporation (TSX:RC), a leading provider of specialized software and hardware products for electronic payment processing, today reported its financial results for its fiscal 2015 first quarter ended December 31, 2014. All figures are reported in thousands of U.S. dollars unless otherwise stated.

Q1 Fiscal 2015 Highlights (Unless otherwise noted comparisons are made between Q1 fiscal 2015 and Q1 fiscal 2014 results)

• Total revenue increased 2% to $5,846
• Recurring Payment Processing Services revenue increased 6% to $3,243
• Digital Imaging revenue increased 10% to $2,449 from $2,226
• Gross profit increased 11% to $3,433 (59% of total revenue) from $3,087 (54% of total revenue)
• Operating income increased 37% to $1,017 from $741
• Adjusted EBITDA improved 30% to $1,376 from $1,061
• Net income grew 44% to $1,123 from $780
• The Company added 1,087 new end-user seats to bring its ITMS network to a total of 38,067 seats, an increase of 15% from one-year earlier and 3% from the prior quarter
• The Company generated $852 in cash from operations during the quarter and ended Q1 fiscal 2015 with cash and cash equivalents totalling $23,009
• The Board declared a quarterly cash dividend of $0.015, a 50% increase from the quarterly dividend declared and paid over the last year

"During the past quarter, we increased both our recurring revenue and Digital Imaging revenue over the prior year resulting in strong margin improvement and Adjusted EBITDA growing 30% to $1,376," said Randy Fowlie, President and CEO of RDM Corporation. "This translated into strong cash flow generation allowing the Board to increase our annual dividend by 50%. We continue to see evidence of strong market acceptance and our sales pipeline remains strong."

Dividend

As part of our quarterly dividend program the Board of Directors declared a quarterly cash dividend of $0.015 per common share. The payment date will be March 5, 2015, to shareholders of record as of February 19, 2015. This is a 50% increase from the $0.01 per share quarterly dividend paid over the last year. Future declarations of dividends are subject to the final determination and discretion of our Board of Directors.

The dividends to be paid on March 5, 2015 are designated as "eligible dividends" for the purpose of section 89 of the Income Tax Act (Canada).

Conference Call

RDM will be hosting a conference call to discuss the Company's 2015 first quarter results on Thursday, January 29, 2015 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) and operating income are 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 and operating income do 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 and operating income 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 provides large financial institutions with Remote Deposit Capture (RDC) solutions designed to help their clients simplify the way they do business. RDM processes over $600 billion in payments annually and helps financial institutions increase revenue, expand market share and improve customer service for over 80,000 end-users.

Four of the top ten financial institutions in the United States use RDM's payment processing solutions. RDM serves 32 percent of the top 100 Fortune 500 companies including brokerage firms, big-box retailers, healthcare and insurance providers, and government entities. Working with clients for over 25 years, RDM provides both software and hardware solutions including web-based and mobile RDC, and manufactures a wide range of digital imaging scanners. For more information, visit www.rdmcorp.com.

Forward-looking statements

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)
	December 31, 2014	September 30, 2014
Assets:
Current assets:
Cash and cash equivalents	$                   23,009	$                   22,422
Accounts receivable	2,610	3,292
Unbilled revenue	112	124
Inventories	1,927	2,132
Investment tax credit receivable	218	188
Prepaid and other assets	864	807
Total current assets	28,740	28,965
Investment tax credits	225	270
Property and equipment	2,420	2,504
Intangible assets	705	771
Total assets	$                   32,090	$                   32,510
Liabilities and shareholders' equity:
Current liabilities:
Accounts payable and accrued liabilities	$                     2,535	$                     3,989
Deferred revenue	270	303
Derivative liability	47	-
Total current liabilities	2,852	4,292
Shareholders' equity:
Share capital	20,563	20,512
Contributed surplus	2,618	2,535
Accumulated other comprehensive income	(47)	-
Retained earnings	6,104	5,171
Total shareholders' equity	29,238	28,218
Total liabilities and shareholders' equity	$                   32,090	$                  32,510

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 December 31	2014	2013
Revenue:
Payment Processing Services	$           3,397	$           3,525
Digital Imaging Products	2,449	2,226
	5,846	5,751
Cost of revenue	2,413	2,664
Gross profit	3,433	3,087
Operating expenses:
Sales and marketing	750	766
Research and development	1,163	1,056
General and administration	503	524
	2,416	2,346
Income from operations	1,017	741
Other items:
Foreign exchange gain	16	54
Interest income	15	9
Other income	120	-
	151	63
Income before income taxes	1,168	804
Current income tax expense	45	24
Income for the period	$           1,123	$               780
Income per share – basic and diluted	$             0.05	$            0.04

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 December 31	2014	2013
Income for the period	$           1,123	$               780
Other comprehensive income:
Effective portion of changes in fair value of cash flow hedges	(47)	(64)
Comprehensive income	$           1,076	$               716

RDM CORPORATION
Condensed Consolidated Interim Statements of Changes in Shareholders' 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, 2013	$  20,100	$         2,445	$             29	$     2,922	$     25,496
Total comprehensive income for the period:
Income for the period	-	-	-	780	780
Effective portion of changes in fair value of cash flow hedges	-	-	(64)	-	(64)
Issuance of share capital	103	2	-	-	105
	20,203	2,447	(35)	3,702	26,317
Stock-based compensation	-	25	-	-	25
Balance as at December 31, 2013	$   20,203	$         2,472	$            (35)	$     3,702	$     26,342
Balance as at September 30, 2014	$  20,512	$         2,535	$                -	$     5,171	$     28,218
Total comprehensive income for the period:
Income for the period	-	-	-	1,123	1,123
Effective portion of changes in fair value of cash flow hedges	-	-	(47)	-	(47)
Issuance of share capital	51	(24)	-	-	(27)
Dividends paid	-	-	-	(190)	(190)
	20,563	2,511	(47)	6,104	29,731
Stock–based compensation	-	107	-	-	107
Balance as at December 31, 2014	$  20,563	$         2,618	$            (47)	$     6,104	$     29,238

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)
Three months ended December 31	2014	2013
Cash provided by (used in):
Operations:
Income for the period	$               1,123	$                  780
Items not involving cash:
Current income tax expense	45	24
Depreciation of furniture and equipment	181	150
Amortization of intangible assets	71	145
Stock-based compensation	107	25
Interest earned	(15)	(9)
Change in non-cash operating working capital	(665)	(1,112)
Cash provided by operations	847	3
Interest received	5	9
Net cash provided by (used in) operation activities	852	12
Financing:
Issuance of share capital	27	105
Dividends paid	(190)	-
Cash provided by financing activities	(163)	105
Investing:
Purchase of furniture and equipment	(97)	(590)
Additions to intangible assets	(5)	(306)
Cash used in investing activities	(102)	(896)
Increase (decrease) in cash and cash equivalents	587	(779)
Cash and cash equivalents, beginning of period	22,422	20,126
Cash and cash equivalents, end of period	$            23,009	$            19,347

  

RDM CORPORATION
Reconciliation of Adjusted EBITDA to Income for the period
(Amounts in thousands of U.S. Dollars)

In thousands of U.S. dollars
Three months ended December 31	2014	2013
Net income	$           1,123	$               780
Income tax expense	45	24
Interest income	(15)	(9)
Depreciation and amortization	252	295
Foreign exchange gain	(16)	(54)
Stock-based compensation	107	25
Other income	(120)	-
Adjusted EBITDA	$           1,376	$           1,061

SOURCE RDM Corporation

Randy Fowlie, President & CEO, RDM Corporation, [phone] x340, [email protected]; Rui Malhinha, Chief Financial Officer, RDM Corporation, [phone] x284, [email protected]