RDM Corporation Reports Fiscal 2015 Second Quarter Financial Results

Revenue and Adjusted EBITDA up 11% and 50% year-over-year, respectively

WATERLOO, ON, April 30, 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 three and six-months ended March 31, 2015. All financial results are reported in thousands of U.S. dollars unless otherwise stated.

Q2 Fiscal 2015 Highlights (Unless otherwise noted, comparisons are made between Q2 fiscal 2015 and Q2 fiscal 2014)

• Total revenue increased 11% to $5,758 from $5,185
• Recurring Payment Processing revenue improved 9% to $3,356 from $3,091
• Total Payment Processing revenue was $3,544 compared to $3,615
• Digital Imaging revenue grew by 41% to $2,214 from $1,570
• Operating income increased 68% to $1,059 compared to $628
• Adjusted EBITDA improved 50% to $1,431 from $952
• Net income grew 21% to $789 from $652
• Generated $621 in cash from operations, ending the quarter with $23,436 in cash and cash equivalents
• Added 1,710 new end-user seats bringing RDM's ITMS network to a total of 39,777 seats, an increase of 15% year-over-year and 4% over the prior quarter
• Two new financial institutions selected RDM to replace existing RDC providers in the quarter
• The Board of Directors declared a quarterly cash dividend of $0.015 per share

Year-to-date Highlights (Unless otherwise noted, comparisons are made between year-to-date fiscal 2015 and fiscal 2014)

• Total revenue increased 6% to $11,604 from $10,936
• Recurring Payment Processing revenue grew 7% to $6,599 from $6,157
• Total Payment Processing revenue was $6,941 compared to $7,140
• Digital Imaging revenue grew by 23% to $4,663 from $3,796
• Operating income increased 52% to $2,076 compared to $1,369
• Adjusted EBITDA improved 39% to $2,807 from $2,014
• Net income grew 34% to $1,912 from $1,432
• Generated $1,473 in cash from operations, up 25% from $1,182

"Growth in both our recurring Payment Processing and Digital Imaging revenue translated into increased profitability in the quarter. In addition, we continue to see evidence of strong market acceptance this quarter with two new financial institutions selecting RDM to replace existing RDC providers," said Randy Fowlie, President and CEO of RDM Corporation. "One is a top 30 US bank and the other is a large international bank. We look forward to partnering with these two new customers going forward."

Dividend

A quarterly dividend of $0.015 per share will be paid on June 8, 2015 to shareholders of record on May 25, 2015. The dividends to be paid on May 25, 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 second quarter results on Thursday, April 30, 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 for 14 days 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 flow before interest, income taxes, and depreciation and amortization, foreign exchange, stock-based compensation and one-time charges. 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.

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
Condensed Consolidated Interim Balance Sheets
(Amounts in thousands of U.S. Dollars)

(Not audited or reviewed by the Company's external auditor)
			March 31, 2015		September 30, 2014
Assets:
Current assets:
	Cash and cash equivalents	$	23,436	$	22,422
	Accounts receivable		3,755		3,292
	Unbilled revenue		123		124
	Inventories		1,744		2,132
	Investment tax credit receivable		218		188
	Prepaid and other assets		781		807
Total current assets			30,057		28,965
Investment tax credits			-		270
Property and equipment			2,273		2,504
Intangible assets			839		771
Total assets		$	33,169	$	32,510
Liabilities and shareholders' equity:
Current liabilities:
	Accounts payable and accrued liabilities	$	2,642	$	3,989
	Deferred revenue		288		303
	Derivative liability		85		-
Total current liabilities			3,015		4,292
Shareholders' equity:
	Share capital		21,106		20,512
	Contributed surplus		2,506		2,535
	Accumulated other comprehensive income		(85)		-
	Retained earnings		6,627		5,171
Total shareholders' equity			30,154		28,218
Total liabilities and shareholders' equity		$	33,169	$	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				Six months ended
			March 31				March 31
			2015		2014		2015		2014
Revenue:
	Payment Processing Services	$	3,544	$	3,615	$	6,941	$	7,140
	Digital Imaging Products		2,214		1,570		4,663		3,796
			5,758		5,185		11,604		10,936
Cost of revenue			2,322		2,096		4,735		4,760
Gross profit			3,436		3,089		6,869		6,176
Operating expenses:
	Sales and marketing		737		722		1,487		1,488
	Research and development		1,143		1,176		2,306		2,232
	General and administration		497		563		1,000		1,087
			2,377		2,461		4,793		4,807
Operating income			1,059		628		2,076		1,369
Other items:
	Foreign exchange gain (loss)		(31)		39		(15)		93
	Interest income		16		9		31		18
	Other income		-		-		120		-
			(15)		48		136		111
Income before income taxes			1,044		676		2,212		1,480
Current income tax expense			255		24		300		48
Net income		$	789	$	652	$	1,912	$	1,432
Earnings per share – basic and diluted		$	0.04	$	0.03	$	0.09	$	0.07
Weighted average common shares
	outstanding during the period		21,849,351		21,500,976		21,836,851		21,445,976

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				Six months ended
				March 31				March 31
				2015		2014		2015		2014
Net income			$	789	$	652	$	1,912	$	1,432
Other comprehensive income:
	Effective portion of changes in fair
		value of cash flow hedges		(38)		64		(85)		-
Comprehensive income			$	751	$	716	$	1,827	$	1,432

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 September 30, 2013			$	20,100	$	2,445	$	29	$	2,922	$	25,496
	Total comprehensive income for the period:
		Net income		-		-		-		1,432		1,432
		Effective portion of changes in fair value of cash flow hedges		-		-		(29)		-		(29)
	Issuance of share capital			266		(56)		-		-		210
	Dividends paid			-		-		-		(195)		(195)
				20,366		2,389		-		4,159		26,914
	Stock-based compensation			-		53		-		-		53
Balance as at March 31, 2014			$	20,366	$	2,442	$	-	$	4,159	$	26,967
Balance as at September 30, 2014			$	20,512	$	2,535	$	-	$	5,171	$	28,218
	Total comprehensive income for the period:
		Net income		-		-		-		1,912		1,912
		Effective portion of changes in fair value of cash flow hedges		-		-		(85)		-		(85)
	Issuance of share capital			594		(241)		-		-		353
	Dividends paid			-		-		-		(456)		(456)
				21,106		2,294		(85)		6,627		29,942
	Stock–based compensation			-		212		-		-		212
Balance as at March 31, 2015			$	21,106	$	2,506	$	(85)	$	6,627	$	30,154

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)
Six months ended March 31				2015		2014
Cash provided by (used in):
Operations:
Net income			$	1,912	$	1,432
	Items not involving cash:
		Current income tax expense		300		48
		Depreciation of furniture and equipment		357		338
		Amortization of intangible assets		162		254
		Write-down of property and equipment		-		7
		Stock-based compensation		212		53
		Interest earned		(31)		(9)
Change in non-cash operating working capital				(1,470)		(950)
Cash provided by operations				1,442		1,173
Interest received				31		9
Net cash provided by (used in) operation activities				1,473		1,182
Financing:
	Issuance of share capital			353		210
	Dividends paid			(456)		(195)
Cash provided by (used in) financing activities				(103)		15
Investing:
	Purchase of furniture and equipment			(126)		(679)
	Additions to intangible assets			(230)		(517)
Cash used in investing activities				(356)		(1,196)
Increase in cash and cash equivalents				1,014		1
Cash and cash equivalents, beginning of period				22,422		20,126
Cash and cash equivalents, end of period			$	23,436	$	20,127

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				Six months ended
		March 31				March 31
		2015		2014		2015		2014
Net income	$	789	$	652	$	1,912	$	1,432
Income tax expense		255		24		300		48
Interest income		(16)		(9)		(31)		(18)
Depreciation and amortization		267		296		519		592
Foreign exchange loss (gain)		31		(39)		15		(93)
Stock-based compensation		105		28		212		53
Other income		-		-		(120)		-
Adjusted EBITDA	$	1,431	$	952	$	2,807	$	2,014

SOURCE RDM Corporation

Contacts: Randy Fowlie, Chief Executive Officer & President, RDM Corporation, [phone] x 340, [email protected]; Rui Malhinha, Chief Financial Officer, RDM Corporation, [phone] x 284,[email protected]