RDM Corporation Reports Fiscal 2015 Third Quarter Financial Results

- Company increased Adjusted EBITDA by 39% year-over-year and generated cash from operations of $1.6 million -

WATERLOO, ON, July 23, 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 nine months ended June 30, 2015. All financial results are reported in thousands of U.S. dollars unless otherwise stated.

Q3 Fiscal 2015 Highlights (Unless otherwise noted, comparisons are made between Q3 fiscal 2015 and Q3 fiscal 2014)

• Total revenue was $5,811 an increase of 4% compared to $5,568
• Recurring Payment Processing revenue was $3,569, up 11% from $3,201
• Total Payment Processing revenue was $3,698, an increase of 3% from $3,578
• Digital Imaging revenue grew by 6% to $2,113 from $1,990
• Gross margin was 62% compared to 56%
• Operating income increased 61% to $1,154 from $717
• Adjusted EBITDA was $1,516 compared to $1,093, an increase of 39%
• The Company added 4,269 end user seats and exited the quarter with 44,046 seats, an increase of 11% from the prior quarter
• The Company generated $1,634 in cash from operations and ended the quarter with $24,677 in cash and cash equivalents
• One new financial institution selected RDM to replace existing RDC provider in the quarter

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

• Total revenue increased 6% to $17,415 from $16,504
• Recurring Payment Processing revenue grew 9% to $10,168 from $9,358
• Total Payment Processing revenue was $10,639 compared to $10,718
• Digital Imaging revenue grew by 17% to $6,776 from $5,786
• Operating income increased to $3,230 compared to $2,086
• Adjusted EBITDA improved 39% to $4,323 from $3,107
• Net income grew 66% to $3,263 from $1,967
• Generated $3,107 in cash from operations, compared to $1,331
• Three new financial institutions selected RDM to replace existing RDC providers

"We had another strong quarter with growth in both our operating income and adjusted EBITDA," said Randy Fowlie, President and CEO of RDM Corporation. "The increase in both recurring Payment Processing revenue and Digital Imaging generated strong cash flows this quarter."

Dividend

A quarterly dividend of $0.015 per share will be paid on September 9, 2015 to shareholders of record on August 21, 2015. The dividends to be paid on September 9, 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 third quarter results on Thursday, July 23, 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 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
Condensed Consolidated Interim Balance Sheets
(Amounts in thousands of U.S. Dollars)
(Not audited or reviewed by the Company's external auditor)
			June 30, 2015			September 30, 2014
Assets:
Current assets:
	Cash and cash equivalents	$	24,677			$	22,422
	Accounts receivable		3,643				3,292
	Unbilled revenue		121				124
	Inventories		1,912				2,132
	Investment tax credit receivable		100				188
	Prepaid and other assets		816				807
Total current assets			31,269				28,965
Investment tax credits			-				270
Property and equipment			2,230				2,504
Intangible assets			748				771
Total assets		$	34,247			$	32,510
Liabilities and shareholders' equity:
Current liabilities:
	Accounts payable and accrued liabilities	$	2,552			$	3,989
	Deferred revenue		270				303
Total current liabilities			2,822				4,292
Shareholders' equity:
	Share capital		21,106				20,512
	Contributed surplus		2,609				2,535
	Accumulated other comprehensive income		-				-
	Retained earnings		7,710				5,171
Total shareholders' equity			31,425				28,218
Total liabilities and shareholders' equity		$	34,247			$	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 June 30						Nine months ended June 30
				2015			2014			2015			2014
Revenue:
	Payment Processing Services		$	3,698		$	3,578		$	10,639		$	10,718
	Digital Imaging Products			2,113			1,990			6,776			5,786
				5,811			5,568			17,415			16,504
Cost of revenue				2,223			2,436			6,958			7,196
Gross profit				3,588			3,132			10,457			9,308
Operating expenses:
	Sales and marketing			729			807			2,216			2,295
	Research and development			1,129			1,146			3,435			3,378
	General and administration			576			462			1,576			1,549
				2,434			2,415			7,227			7,222
Operating income				1,154			717			3,230			2,086
Other items:
	Foreign exchange gain (loss)			(7)			(17)			(22)			76
	Interest income			18			12			49			30
	Other income (expense)			451			(153)			571			(153)
				462			(158)			598			(47)
Income before income taxes				1,616			559			3,828			2,039
Current income tax expense				265			24			565			72
Net income			$	1,351		$	535		$	3,263		$	1,967
Earnings per share – basic and diluted			$	0.06		$	0.03		$	0.15		$	0.09
Weighted average common shares
	outstanding during the period			22,024,976			21,589,226			21,836,851			21,485,476

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
							2015				2014				2015				2014
Net income					$		1,351		$		535		$		3,263		$		1,967
Other comprehensive income:
	Effective portion of changes in fair
		value of cash flow hedges					85				-				-				-
Comprehensive income					$		1,436		$		535		$		3,263		$		1,967

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			-			-			-			1,967				1,967
		Effective portion of changes in fair value of cash flow hedges			-			-			(29)			-				(29)
	Issuance of share capital				383			(98)			-			-				285
	Dividends paid				-			-			-			(395)				(395)
					20,483			2,347			-			4,494				27,324
	Stock-based compensation				-			102			-			-				102
Balance as at June 30, 2014				$	20,483		$	2,449		$	-		$	4,494		$		27,426
Balance as at September 30, 2014				$	20,512		$	2,535		$	-		$	5,171		$		28,218
	Total comprehensive income for the period:
		Net income			-			-			-			3,263				3,263
		Effective portion of changes in fair value of cash flow hedges			-			-			-			-				-
	Issuance of share capital				594			(241)			-			-				353
	Dividends paid				-			-			-			(724)				(724)
					594			(241)						2,539				2,892
	Stock–based compensation				-			315			-			-				315
Balance as at June 30, 2015				$	21,106		$	2,609		$	-		$	7,710		$		31,425

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					2015				2014
Cash provided by (used in):
Operations:
Net income			$		3,263		$		1,967
	Items not involving cash:
		Current income tax expense			565				72
		Depreciation of property and equipment			514				567
		Amortization of intangible assets			264				352
		Write-down of property and equipment			-				7
		Stock-based compensation			315				102
		Interest earned			(49)				(12)
Change in non-cash operating working capital					(1,805)				(1,733)
Cash provided by operations					3,067				1,322
Interest received					40				9
Net cash provided by operating activities					3,107				1,331
Financing:
	Issuance of share capital				353				285
	Dividends paid				(724)				(395)
Cash used in by financing activities					(371)				(110)
Investing:
	Purchase of property and equipment				(240)				(1,278)
	Additions to intangible assets				(241)				(537)
Cash used in investing activities					(481)				(1,815)
Increase (decrease) in cash and cash equivalents					2,255				(594)
Cash and cash equivalents, beginning of period					22,422				20,126
Cash and cash equivalents, end of period			$		24,677		$		19,532

RDM CORPORATION
Reconciliation of Adjusted EBITDA to Income for the period
(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
				2015			2014			2015			2014
Net income			$	1,351		$	535		$	3,263		$	1,967
Income tax expense				265			24			565			72
Interest income				(18)			(12)			(49)			(30)
Depreciation and amortization				259			327			778			919
Foreign exchange loss (gain)				7			17			22			(76)
Stock-based compensation				103			49			315			102
Other expense (income)				(451)			153			(571)			153
Adjusted EBITDA			$	1,516		$	1,093		$	4,323		$	3,107

SOURCE RDM Corporation

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