RDM Corporation Reports Fiscal 2015 Fourth Quarter and Year-End Financial Results

- Company delivers top-line growth, expanded margins and increased profitability - 

WATERLOO, ON, Nov. 19, 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 the fourth quarter and fiscal year ended September 30, 2015. All financial results are reported in thousands of U.S. dollars unless otherwise stated.

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

• Total revenue was $23,530 an increase of 4% compared to $22,689
• Recurring Payment Processing revenue was $13,759, up 9% from $12,579
• Total Payment Processing revenue was $14,295, an increase of $59 from $14,236
• Digital Imaging revenue grew by 9% to $9,235 from $8,453
• Gross margin was 61% up from 56%
• Operating income increased 55% to $4,560 from $2,946
• Adjusted EBITDA was $6,002, up 41% from $4,271
• Net income was $5,326, up from $2,845
• The Company added 7,641 end user seats during the year and exited fiscal 2015 with 44,621 seats, an increase of 21% over fiscal 2014
• Generated $5,271 in cash from operations compared to $4,422, and ended the year with $26,405 in cash and cash equivalents
• Three financial institutions selected RDM to replace their existing RDC provider

Q4 Fiscal Highlights (Unless otherwise noted, comparisons are made between Q4 fiscal 2015 and Q4 2014)

• Total revenue was $6,115 compared to $6,185
• Recurring Payment Processing revenue was $3,591, up 11% from $3,221
• Total Payment Processing revenue increased 4% to $3,656 from $3,518
• Digital Imaging revenue was $2,459 compared to $2,667
• Gross margin was 62% up from 53%
• Operating income increased 55% to $1,330 compared to $860
• Adjusted EBITDA improved 47% to $1,679 from $1,165
• Net income grew 135% to $2,063 from $878
• Generated $2,164 in cash from operations compared to $3,091

"We are very pleased with our full year operating performance for fiscal 2015. We grew both our recurring Payment Processing revenue base and our Digital Imaging business 9%," said Randy Fowlie, President and CEO of RDM Corporation. "This combination resulted in outstanding financial results for the year. Adjusted EBITDA is up 41% and cash flow from operations was strong. We won three new contracts with financial institutions during the year and look forward to continued success in 2016."

Dividend

A quarterly dividend of $0.015 per share will be paid on December 18, 2015 to shareholders of record on December 4, 2015. The dividends to be paid on December 18, 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 fiscal 2015 fourth quarter and year-end results on Thursday, November 19, 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 do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies.  Adjusted EBITDA is provided to assist management and investors in determining the Company's approximate operating cash flow before interest, income taxes, and depreciation and amortization, foreign exchange, stock-based compensation and one-time charges. 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.

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 31 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
Consolidated Balance Sheets
(Amounts in thousands of U.S. Dollars)
(Not audited or reviewed by the Company's external auditor)
As at September 30		2015		2014
Assets:
Current assets:
	Cash and cash equivalents	$	26,405	$	22,422
	Accounts receivable	3,598		3,292
	Unbilled revenue	48		124
	Inventories	1,821		2,132
	Investment tax credit receivable	130		188
	Prepaid and other assets	836		807
Total current assets		32,838		28,965
Investment tax credits		1,586		270
Property and equipment		1,910		2,504
Intangible assets		701		771
Total assets		$	37,035	$	32,510
Liabilities and shareholders' equity:
Current liabilities:
	Accounts payable and accrued liabilities	$	2,869	$	3,989
	Deferred revenue	282		303
Total current liabilities		3,151		4,292
Deferred income taxes		561		-
Shareholders' equity:
	Share capital	21,106		20,512
	Contributed surplus	2,697		2,535
	Retained earnings	9,520		5,171
Total shareholders' equity		33,323		28,218
Total liabilities and shareholders' equity		$	37,035	$	32,510

RDM CORPORATION
Consolidated 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        September 30				Years ended      September 30
		2015		2014		2015		2014
Revenue:
	Payment Processing Services	$	3,656	$	3,518	$	14,295	$	14,236
	Digital Imaging Products	2,459		2,667		9,235		8,453
		6,115		6,185		23,530		22,689
Cost of revenue		2,326		2,878		9,284		10,074
Gross profit		3,789		3,307		14,246		12,615
Operating expenses:
	Sales and marketing	658		843		2,874		3,138
	Research and development	1,216		1,062		4,651		4,440
	General and administration	585		542		2,161		2,091
		2,459		2,447		9,686		9,669
Income from operations		1,330		860		4,560		2,946
Other items:
	Foreign exchange gain	56		31		34		107
	Interest income	21		11		70		41
	Other income (expense)	1,590		-		2,161		(153)
		1,667		42		2,265		(5)
Net income before income taxes		2,997		902		6,825		2,941
Income tax expense
	Current	373		24		938		96
	Deferred	561		-		561		-
		934		24		1,499		96
Net income for the period		$	2,063	$	878	$	5,326	$	2,845
Earnings per share – basic and diluted		$	0.09	$	0.04	$	0.24	$	0.13

RDM CORPORATION
Consolidated Statements of Comprehensive Income
(Amounts in thousands of U.S. Dollars)
(Not audited or reviewed by the Company's external auditor)
		Three months ended         September 30				Years ended         September 30
		2015		2014		2015		2014
Net income for the period		$	2,063	$	878	$	5,326	$	2,845
Other comprehensive income:
	Effective portion of changes in fair value of cash flow hedges	-		-		-		(29)
Comprehensive income		$	2,063	$	878	$	5,326	$	2,816

RDM CORPORATION
Consolidated 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 year:
		Net income for the year	-		-		-		2,845		2,845
		Effective portion of changes in fair value of cash flow hedges	-		-		(29)		-		(29)
	Issuance of share capital		412		(108)		-		-		304
	Dividends paid		-		-		-		(596)		(596)
			20,512		2,337		-		5,171		28,020
	Stock-based compensation		-		198		-		-		198
Balance as at September 30, 2014			$	20,512	$	2,535	$	-	$	5,171	$	28,218
Balance as at September 30, 2014			$	20,512	$	2,535	$	-	$	5,171	$	28,218
	Total comprehensive income for the year:
		Net income for the year	-		-		-		5,326		5,326
		Effective portion of changes in fair value of cash flow hedges	-		-		-		-		-
	Issuance of share capital		594		(241)		-		-		353
	Dividends paid		-		-		-		(977)		(977)
			594		(241)		-		4,349		4,702
	Stock–based compensation		-		403		-		-		403
Balance as at September 30, 2015			$	21,106	$	2,697	$	-	$	9,520	$	33,323

RDM CORPORATION
Consolidated Statements of Cash Flows
(Amounts in thousands of U.S. Dollars)
(Not audited or reviewed by the Company's external auditor)
Years ended September 30			2015		2014
Cash provided by (used in):
Operations:
Net income for the period			$	5,326	$	2,845
	Items not involving cash:
		Current income tax expense	938		96
		Deferred income tax expense	561		-
		Depreciation of property and equipment	681		772
		Amortization of intangible assets	358		355
		Loss on disposal of property and equipment	289		-
		Stock-based compensation	403		198
		Interest earned	(70)		(41)
Change in non-cash operating working capital			(3,278)		162
Cash provided by operations			5,208		4,387
Interest received			63		35
Net cash provided by operating activities			5,271		4,422
Financing:
	Issuance of share capital		353		304
	Dividends paid		(977)		(596)
Cash used in financing activities			(624)		(292)
Investing:
	Purchase of property and equipment		(376)		(1,290)
	Additions to intangible assets		(288)		(544)
Cash used in investing activities			(664)		(1,834)
Increase in cash and cash equivalents			3,983		2,296
Cash and cash equivalents, beginning of period			22,422		20,126
Cash and cash equivalents, end of period			$	26,405	$	22,422

RDM CORPORATION
Reconciliation of Adjusted EBITDA to Income (loss) for the period
(Amounts in thousands of U.S. Dollars)
(Not audited or reviewed by the Company's external auditor)
	Three months ended September 30				Years ended September 30
	2015		2014		2015		2014
Net income for the period	$	2,063	$	878	$	5,326	$	2,845
Income tax expense	934		24		1,499		96
Interest income	(21)		(11)		(70)		(41)
Depreciation and amortization	261		208		1,039		1,127
Foreign exchange (gain) loss	(56)		(30)		(34)		(107)
Stock-based compensation	88		96		403		198
Other (income) expense	(1,590)		-		(2,161)		153
Adjusted EBITDA for the period	$	1,679	$	1,165	$	6,002	$	4,271
Other (income) expense is comprised of:
	Three months ended September 30				Years ended September 30
Years ended September 30	2015		2014		2015		2014
Change in estimated royalties	$	-	$	-	$	(266)	$	-
Recognition of investment tax credits	(1,879)		-		(2,064)		-
Change in settlement claim	-		-		(120)		-
Loss on disposal	289		-		289		-
Obligation for future payments	-		-		-		153
Other (income) expense	$	(1,590)	$	-	$	(2,161)	$	153

 

SOURCE RDM Corporation

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