RDM Corporation Reports Fourth Quarter and Year End Financial Results

Strong performance in Payment Processing Drives Increased Profitability

Toronto Stock Exchange Symbol: RC

WATERLOO, ON, Nov. 22, 2012 /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 year and three-month period ended September 30, 2012. All figures are reported in U.S. dollars unless otherwise stated.

Q4 2012 Highlights

• Total revenue was $5.7 million in the fourth quarter of fiscal 2012, an increase of 16% from $4.9 million in Q4 2011, and up 9% from $5.2 million in the previous quarter.
• Payment Processing Services revenue was $3.1 million, up 17% from $2.7 million in Q4 2011, and a 6% increase over the prior quarter.
• Revenue for Digital Imaging Products increased by 13% to $2.6 million, as compared to $2.3 million for Q4 of 2011. Compared to Q3 2012, revenues for Digital Imaging were up by 18% from $2.2 million.
• Gross profit was $2.9 million or 54% of revenues in Q4 2012, compared to $2.2 million or 46% of revenues in Q4 2011, and $2.7 million or 53% of revenues in the prior quarter.
• The Company ended the year with over 28,500 seats on its ITMS network, an increase of 30% from one year earlier and 4% compared to the prior quarter.
• EBITDA was $983,000 in the fourth quarter of 2012, compared to negative EBITDA of $854,000 a year earlier.
• Net income was $616,000 or $0.03 per share in Q4 2012, compared to a $1.5 million loss in the fourth quarter of 2011.
• Operating Income was $462,000, as compared to $76,000 for the same period last year.
• The Company generated $2.3 million in cash from operations during the quarter and ended the period with a cash balance of $18.9 million.

2012 Annual Highlights

• Total revenue in 2012 was $20.4, down 4.7% from $21.4 million in 2011
• Payment Processing Services revenue grew by 14% from $10.2 million in 2011 to $11.6 million in 2012. Digital Imaging revenue was $8.8 million in 2012 compared to $11.2 million in 2011.
• Gross profit increased from $8.4 million in 2011 to $10.4 million in 2012 and as a percentage of revenue grew from 39% to 51%.
• The Company added over 6,500 new end user seats during the year, an increase of 30% over 2011.
• Net income for 2012 was $1.7 million, compared to a net loss of $230,000 in 2011.
• EBITDA for 2012 was $3.1 million, up 138% from $1.3 million in 2011.
• The Company generated $4.2 million in cash from operations during the year. The Company ended the year with $18.9 million in cash and cash equivalents.

"I am very pleased with our performance for 2012," stated Randy Fowlie, President and CEO of RDM, "We continue to see strong customer adoption of our Payment Processing Services, as evidenced by the 30% growth in seats. We won major new accounts within the small business groups of our existing customer base. In addition, we are seeing a strong pipeline of mobile pilots with our existing financial institutions."

"We reported a $1.9 million improvement in our bottom line, and generated $4.2 million in cash from operations. While our Digital Imaging revenue was down year over year, our gross margins improved.  We ended the year with $18.9 million in cash. This strong cash position provides us the opportunity to make investments where necessary to grow our business"

"We feel we have accomplished a lot this past year, both in terms of profitability and sales momentum, and we look forward to building on this progress throughout fiscal 2013."

Conference Call
RDM will be hosting a conference call to discuss the Company's fourth quarter results on November 22, 2012 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 will be filed on www.sedar.com.

Non-IFRS Measures
EBITDA (earnings before interest, taxes, depreciation and amortization) is provided to assist management and investors in determining the Corporation's approximate operating cash flows before interest, income taxes, and depreciation and amortization. EBITDA does 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 EBITDA in making investment decisions about the Company and measuring the operational results.

About RDM Corporation
RDM Corporation is headquartered in Waterloo, Ontario and trades on the Toronto Stock Exchange under the symbol RC. RDM is a leading provider of specialized software and hardware products for electronic payment processing. RDM has pioneered electronic check conversion systems and web based image and transaction management services for banks, retailers, payment processors and government agencies as well as print quality control and image quality systems for a variety of global customers. For more information, visit RDM's website at www.RDMCorp.com.

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 Statements of Financial Position (Amounts in thousands of U.S. Dollars)
			September 30, 2012		September 30,2011
Assets:
Current assets:
	Cash and cash equivalents		$	18,897	$	14,815
	Accounts receivable			3,094		2,799
	Inventories			2,469		3,455
	Investment tax credit receivable			336		520
	Prepaid and other assets			569		639
	Derivative assets			63		-
Total current assets				25,428		22,228
Investment tax credits				453		602
Furniture and equipment				1,951		2,455
Intangible assets				860		1,162
Total assets			$	28,692	$	26,447
Liabilities and shareholders' equity:
Current liabilities:
	Accounts payable and accrued liabilities		$	2,577	$	2,376
		Deferred revenue		275		279
		Derivative liabilities		-		67
Total current liabilities				2,852		2,722
Deferred income tax liability				-		-
Shareholders' equity:
		Share capital		19,960		19,960
		Contributed surplus		2,323		2,115
		Accumulated other comprehensive income		116		-
		Retained earnings		3,441		1,650
Total shareholders' equity				25,840		23,725
Commitments
Total liabilities and shareholders' equity			$	28,692	$	26,447

RDM CORPORATION Consolidated Statements of Income (Amounts in thousands of U.S. Dollars, except per share data)
		Three months ended September 30				Year ended September 30
			2012		2011		2012		2011
Revenue:
	Payment Processing Services	$	3,131	$	2,662	$	11,647	$	10,206
	Digital Imaging Products		2,558		2,254		8,793		11,226
			5,689		4,916		20,440		21,432
Cost of revenue			2,763		2,751		10,040		13,020
Gross profit			2,926		2,165		10,400		8,412
Operating expenses:
	Sales and marketing		854		833		3,413		3,317
	Research and development		1,108		913		4,056		3,580
	General and administration		502		343		2,075		2,054
			2,464		2,089		9,544		8,951
Results from operating activities			462		76		856		(539)
Other items:
	Foreign exchange gain (loss)		134		(1,250)		501		584
	Interest income		13		27		90		114
	Other income (expense)		65		(422)		528		(422)
			212		(1,645)		1,119		276
Income (loss) before income taxes			674		(1,569)		1,975		(263)
Current income tax recovery (expense)			-		33		(184)		33
Income (loss) for the period		$	674	$	(1,536)	$	1,791	$	(230)
Income (loss)  per share  - basic and diluted		$	0.03	$	(0.07)	$	0.08	$	(0.01)

RDM CORPORATION Consolidated Statements of Comprehensive Income (Amounts in thousands of U.S. Dollars)
			Three months ended September 30				Year ended September 30
				2012		2011		2012		2011
Income (loss) for the period			$	674	$	(1,536)	$	1,791	$	(230)
Other comprehensive income:
		Effective portion of changes in fair value of cash flow hedges		92		-		116		-
Comprehensive income (loss)			$	766	$	(1,536)	$	1,907	$	(230)

 

RDM CORPORATION Consolidated Statements of Changes in Shareholder's Equity (Amounts in thousands of U.S. Dollars)
			Share capital		Contributed surplus		Accumulated other comprehensive income		Retained earnings		Total
Balance as at October 1, 2010			$	19,371	$	2,083	$	-	$	1,880	$	23,334
	Income (loss) and comprehensive income (loss)			-		-		-		(230)		(230)
	Repurchase of share capital			(164)		28		-		-		(136)
	Issuance of share capital			753		(230)		-		-		523
	Stock-based compensation			-		234		-		-		234
Balance as at September 30, 2011			$	19,960	$	2,115		-	$	1,650	$	23,725
	Total comprehensive income for the period:
		Income for the period		-		-		-		1,791		1,791
		Effective portion of changes in fair value of cash flow hedges		-		-		116		-		116
				-		-		116		1,791		1,907
	Stock-based compensation			-		208		-		-		208
Balance as at September 30, 2012			$	19,960	$	2,323	$	116	$	3,441	$	25,840

RDM CORPORATION Consolidated Statements of Cash Flows (Amounts in thousands of U.S. Dollars)
			Three months ended September 30				Year ended September 30
				2012		2011		2012		2011
Cash provided by (used in):
Operations:
Income (loss) for the period			$	674	$	(1,536)	$	1,791	$	(230)
	Items not involving cash:
		Depreciation of furniture and equipment		218		231		809		889
		Amortization of intangible assets		101		90		369		316
		Future income taxes		-		(208)		-		(195)
		Write-down of furniture and equipment		-		393		-		393
		Write-down of intangible assets		-		87		-		87
		Stock-based compensation		52		65		208		234
		Interest earned		(13)		(28)		(90)		(115)
		Exchange gains (losses) on cash held in foreign currency		246		165		(209)		(605)
Change in non-cash operating working capital				959		668		1,161		417
Cash provided (used in) by operations				2,237		(73)		4,039		1,191
Interest received				27		1		146		88
Net cash provided (used in) by operations				2,264		(72)		4,185		1,279
Financing:
	Issuance of share capital			-		-		-		523
	Repurchase of share capital			-		-		-		(136)
Cash provided by financing activities				-		-		-		387
Investing:
	Purchase of furniture and equipment			(60)		(164)		(305)		(280)
	Additions to intangible assets			(22)		(57)		(67)		(1,001)
Cash used in investing activities				(82)		(221)		(372)		(1,281)
Exchange gains (losses) on cash held in foreign currency				(166)		(138)		269		632
Increase (decrease) in cash and cash equivalents				2,016		(431)		4,082		1,017
Cash and cash equivalents, beginning of period				16,881		15,246		14,815		13,798
Cash and cash equivalents, end of period			$	18,897	$	14,815	$	18,897	$	14,815

 

 

SOURCE: RDM Corporation

Randy Fowlie
CEO & President
RDM Corporation
[phone] x340
[email protected]  

Rui Malhinha
Chief Financial Officer
RDM Corporation
[phone] x284
[email protected]