RDM Corporation Reports Fiscal 2016 Second Quarter Financial Results
- Recurring revenue grows 15% and strong cash flow from operations -
WATERLOO, ON, April 28, 2016 /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, 2016. All financial results are reported in thousands of U.S. dollars unless otherwise stated.
"We executed on the continued growth opportunities within our Payment Processing business, this quarter," said Randy Fowlie, President and CEO of RDM Corporation. "The 15 percent increase in high margin recurring revenue, largely offset weakness in our Digital Imaging business that was due to a restructuring at one of our resellers. As such, we achieved overall gross margin improvements, strong cash from operations and healthy bottom line results. We remain confident in our ability to deliver further growth in our Payment Processing business through new deployments and expansion within our existing customers, and expect revenue from Digital Imaging to be stronger in the second half of the year."
Q2 Fiscal 2016 Highlights (Unless otherwise noted, comparisons are made between Q2 fiscal 2016 and Q2 fiscal 2015)
- Total revenue was $5,139 compared to $5,758
- Recurring Payment Processing revenue was $3,846, up 15% from $3,356
- Total Payment Processing revenue was $3,963, a 12% increase from $3,544
- Digital Imaging revenue was $1,176 compared to $2,214
- Gross margin was 69%, up from 60%
- Operating income was $925 compared to $1,059
- Adjusted EBITDA was $1,368 compared to $1,431
- Net income was $669 compared to $789
- Generated $1,960 in cash from operations, up 216% compared to $621, and ended the quarter with $29,088 in cash and cash equivalents
- End user seats were 46,736 seats, up 17% and 3% over Q2 fiscal 2015 and Q1 fiscal 2016, respectively
- The Board declared a quarterly cash dividend of $0.02 per common share
- Released new single-feed network check scanner
Year-to-date Fiscal 2016 Highlights (Unless otherwise noted, comparisons are made between year-to-date fiscal 2016 and fiscal 2015)
- Total revenue was $10,568 compared to $11,604
- Recurring Payment Processing revenue was $7,586 up 15% from $6,599
- Total Payment Processing revenue was $7,803, a 12% increase from $6,941
- Digital Imaging revenue was $2,765 compared to $4,663
- Gross margin was 68% up from 59%
- Operating income was $2,375 compared to $2,076
- Adjusted EBITDA was $3,129, up 11% from $2,807
- Net income was $1,695 compared to $1,912
- Generated $3,375 in cash from operations, up 129% compared to $1,473
Dividend
A quarterly dividend of $0.02 per share will be paid on June 6, 2016 to shareholders of record on May 23, 2016. The dividends 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 2016 second quarter results on Thursday, April 28, 2016 at 9:00 a.m. EDT. Dial-in numbers are 647-427-7450 or 1-888-231-8191. The call will be webcast live www.rdmcorp.com and http://bit.ly/1Nixd5v. It will also be 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
Condensed Consolidated Interim Balance Sheets
(Amounts in thousands of U.S. Dollars)
(Not audited or reviewed by the Company's external auditor) |
|||
March 31, 2016 |
September 30, 2015 |
||
Assets: |
|||
Current assets: |
|||
Cash and cash equivalents |
$ 29,088 |
$ 26,405 |
|
Accounts receivable |
2,636 |
3,598 |
|
Unbilled revenue |
62 |
48 |
|
Inventories |
2,410 |
1,821 |
|
Investment tax credits receivable |
154 |
130 |
|
Prepaid and other assets |
740 |
836 |
|
Total current assets |
35,090 |
32,838 |
|
Investment tax credits |
1,197 |
1,586 |
|
Property and equipment |
2,028 |
1,910 |
|
Intangible assets |
741 |
701 |
|
Total assets |
$ 39,056 |
$ 37,035 |
|
Liabilities and shareholders' equity: |
|||
Current liabilities: |
|||
Accounts payable and accrued liabilities |
$ 3,036 |
$ 2,869 |
|
Deferred revenue |
403 |
282 |
|
Total current liabilities |
3,439 |
3,151 |
|
Deferred income taxes |
501 |
561 |
|
Shareholders' equity: |
|||
Share capital |
21,960 |
21,106 |
|
Contributed surplus |
2,532 |
2,697 |
|
Retained earnings |
10,624 |
9,520 |
|
Total shareholders' equity |
35,116 |
33,323 |
|
Total liabilities and shareholders' equity |
$ 39,056 |
$ 37,035 |
|
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 March 31 |
Six months ended March 31 |
||||
2016 |
2015 |
2016 |
2015 |
||
Revenue: |
|||||
Payment Processing Services |
$ 3,963 |
$ 3,544 |
$ 7,803 |
$ 6,941 |
|
Digital Imaging Products |
1,176 |
2,214 |
2,765 |
4,663 |
|
5,139 |
5,758 |
10,568 |
11,604 |
||
Cost of revenue |
1,605 |
2,322 |
3,388 |
4,735 |
|
Gross profit |
3,534 |
3,436 |
7,180 |
6,869 |
|
Operating expenses: |
|||||
Sales and marketing |
678 |
737 |
1,359 |
1,487 |
|
Research and development |
1,266 |
1,143 |
2,251 |
2,306 |
|
General and administration |
665 |
497 |
1,195 |
1,000 |
|
2,609 |
2,377 |
4,805 |
4,793 |
||
Operating income |
925 |
1,059 |
2,375 |
2,076 |
|
Other items: |
|||||
Foreign exchange gain (loss) |
3 |
(31) |
(4) |
(15) |
|
Interest income |
27 |
16 |
50 |
31 |
|
Other income |
- |
- |
- |
120 |
|
30 |
(15) |
46 |
136 |
||
Income before income taxes |
955 |
1,044 |
2,421 |
2,212 |
|
Income tax expense |
|||||
Current |
415 |
255 |
832 |
300 |
|
Deferred |
(129) |
- |
(106) |
- |
|
286 |
255 |
726 |
300 |
||
Net income |
$ 669 |
$ 789 |
$ 1,695 |
$ 1,912 |
|
Earnings per share – basic and diluted |
$ 0.03 |
$ 0.04 |
$ 0.07 |
$ 0.09 |
|
Weighted average common shares outstanding during the period |
22,569,351 |
21,849,351 |
22,306,851 |
21,836,851 |
|
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 March 31 |
Six months ended March 31 |
||||
2016 |
2015 |
2016 |
2015 |
||
Net income |
$ 669 |
$ 789 |
$ 1,695 |
$ 1,912 |
|
Other comprehensive income: |
|||||
Effective portion of changes in fair value of cash flow hedges |
41 |
(38) |
- |
(85) |
|
Comprehensive income |
$ 710 |
$ 751 |
$ 1,695 |
$ 1,827 |
|
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, 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 |
||
Balance as at September 30, 2015 |
$ 21,106 |
$ 2,697 |
$ - |
$ 9,520 |
$ 33,323 |
||
Total comprehensive income for the period: |
|||||||
Net income |
- |
- |
- |
1,695 |
1,695 |
||
Effective portion of changes in fair value of cash flow hedges |
- |
- |
- |
- |
- |
||
Issuance of share capital |
854 |
(308) |
- |
- |
546 |
||
Dividends paid |
- |
- |
- |
(591) |
(591) |
||
854 |
(308) |
- |
1,104 |
1,650 |
|||
Stock–based compensation |
- |
143 |
- |
- |
143 |
||
Balance as at March 31, 2016 |
$ 21,960 |
$ 2,532 |
$ - |
$ 10,624 |
$ 35,116 |
See accompanying notes to the condensed consolidated interim financial statements.
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 |
2016 |
2015 |
||
Cash provided by (used in): |
||||
Operations: |
||||
Net income |
$ 1,695 |
$ 1,912 |
||
Items not involving cash: |
||||
Current income tax expense |
832 |
300 |
||
Deferred income tax expense |
(106) |
- |
||
Depreciation of property and equipment |
297 |
357 |
||
Amortization of intangible assets |
192 |
162 |
||
Stock-based compensation |
279 |
212 |
||
Interest earned |
(50) |
(31) |
||
Change in non-cash operating working capital |
168 |
(1,470) |
||
Cash provided by operations |
3,307 |
1,442 |
||
Interest received |
68 |
31 |
||
Net cash provided by operating activities |
3,375 |
1,473 |
||
Financing: |
||||
Issuance of share capital |
546 |
353 |
||
Dividends paid |
(591) |
(456) |
||
Cash used in by financing activities |
(45) |
(103) |
||
Investing: |
||||
Purchase of property and equipment |
(415) |
(126) |
||
Additions to intangible assets |
(232) |
(230) |
||
Cash used in investing activities |
(647) |
(356) |
||
Increase (decrease) in cash and cash equivalents |
2,683 |
1,014 |
||
Cash and cash equivalents, beginning of period |
26,405 |
22,422 |
||
Cash and cash equivalents, end of period |
$ 29,088 |
$ 23,436 |
||
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 March 31 |
Six months ended March 31 |
|||
2016 |
2015 |
2016 |
2015 |
|
Net income |
$ 669 |
$ 789 |
$ 1,695 |
$ 1,912 |
Income tax expense |
286 |
255 |
726 |
300 |
Interest income |
(27) |
(16) |
(50) |
(31) |
Depreciation and amortization |
248 |
267 |
475 |
519 |
Foreign exchange loss (gain) |
(3) |
31 |
4 |
15 |
Stock-based compensation |
195 |
105 |
279 |
212 |
Other expense (income) |
- |
- |
- |
(120) |
Adjusted EBITDA |
$ 1,368 |
$ 1,431 |
$ 3,129 |
$ 2,807 |
SOURCE RDM Corporation
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Contacts: Randy Fowlie, President & CEO, RDM Corporation, (519) 746-8483 x340, [email protected]; Rui Malhinha, Chief Financial Officer, RDM Corporation, (519) 746-8483 x284, [email protected]
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