RDM Corporation Reports Second Quarter Financial Results and Continued Operational Improvement

Toronto Stock Exchange Symbol: RC

WATERLOO, ON, April 26, 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 three month period ended March 31, 2012. All figures are reported in U.S. dollars unless otherwise stated.

Q2 2012 Highlights

• Total revenue was $5.0 million in the second quarter of fiscal 2012, compared to $4.5 million in the previous quarter and $5.5 million in the second quarter of 2011.
• Payment Processing Services revenue was $2.84 million, an increase of 11% from $2.56 million in Q2 2011, and an increase of 4.4% over the prior quarter.
• Gross profit was $2.5 million or 50% of revenues in Q2 2012, compared to $2.1 million or 38% of revenues in Q2 2011, and $2.3 million or 50% of revenues in the prior quarter.
• The Company added 1,656 new end user seats to bring its ITMS network to 26,513 seats, an increase of 33% over the prior year and 6% compared to the prior quarter.
• EBITDA was $564,000 in the second quarter of 2012 compared to $825,000 a year earlier. EBITDA in the second quarter of 2012 includes a gain on foreign exchange of $77,000 compared to $677,000 in Q2 2011.
• Net income was $242,000 or $0.01 per share in Q2 2012, compared to $561,000 or $0.03 per share in the second quarter of 2011.
• The Company generated $540,000 in cash during the quarter and ended the period with a cash balance of $15.6 million.

"Overall, I am pleased with the continued progress we are making with our business. This is the Company's fifth consecutive quarter of increasing gross margin and revenue grew 12% over the prior quarter. We continue to see growth in our Payment Processing Services and our Digital Imaging Hardware revenue increased 24% over the prior quarter," said Randy Fowlie, President and Chief Executive Officer of RDM Corporation. "Our customers are engaging us more and more to assist in the deployment of our Payment Processing Services."

Conference Call

RDM will be hosting a conference call to discuss the Company's second quarter results on April 26, 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 Condensed Consolidated Interim Balance Sheets (Amounts in thousands of U.S. Dollars)
(Unaudited)
			March 31, 2012			September 30,2011
Assets:
Current assets:
	Cash and cash equivalents	$	15,632		$	14,815
	Accounts receivable		2,915			2,799
	Inventories		3,035			3,455
	Investment tax credit receivable		622			520
	Prepaid and other assets		467			639
Total current assets			22,671			22,228
Investment tax credits			507			602
Furniture and equipment			2,318			2,455
Intangible assets			1,020			1,162
Total assets		$	26,516		$	26,447
Liabilities and shareholders' equity:
Current liabilities:
	Accounts payable and accrued liabilities	$	1,847		$	2,376
	Deferred revenue		281			279
	Derivative liabilities		-			67
Total current liabilities			2,128			2,722
Shareholders' equity:
	Share capital		19,960			19,960
	Contributed surplus		2,223			2,115
	Accumulated other comprehensive income		168			-
	Retained earnings		2,037			1,650
Total shareholders' equity			24,388			23,725
Total liabilities and shareholders' equity		$	26,516		$	26,447

RDM CORPORATION Condensed Consolidated Interim Statements of Income (Amounts in thousands of U.S. Dollars, except per share data)
(Unaudited)
		Three months ended March 31							Six months ended March 31
			2012			2011			2012			2011
Revenue:
	Payment Processing Services	$	2,836		$	2,562		$	5,559		$	4,963
	Digital Imaging Products		2,211			2,958			3,994			6,760
			5,047			5,520			9,553			11,723
Cost of revenue			2,531			3,433			4,823			7,498
Gross profit			2,516			2,087			4,730			4,225
Operating expenses:
	Sales and marketing		802			825			1,700			1,700
	Research and development		981			843			1,945			1,785
	General and administration		531			562			1,058			1,274
			2,314			2,230			4,703			4,759
Results from operating activities			202			(143)			27			(534)
Other items:
	Foreign exchange gain		77			677			432			1,631
	Interest		24			27			53			59
			101			704			485			1,690
Income before income taxes			303			561			512			1,156
Current income tax expense			61			-			125			-
Income for the period		$	242		$	561		$	387		$	1,156
Income per share  - basic and  diluted		$	0.01		$	0.03		$	0.02		$	0.05

RDM CORPORATION Condensed Consolidated Interim Statements of Comprehensive Income (Amounts in thousands of U.S. Dollars)
(Unaudited)
		Three months ended March 31					Six months ended March 31
			2012		2011			2012			2011
Income for the period		$	242	$	561		$	387		$	1,156
Other comprehensive income:
	Effective portion of changes in fair value of cash flow hedges		81		-			168			-
Comprehensive income		$	323	$	561		$	555		$	1,156

  

RDM CORPORATION Condensed Consolidated Interim Statements of Changes in Shareholder's Equity (Amounts in thousands of U.S. Dollars)
(Unaudited)
			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 and comprehensive income			-			-			-			1,156			1,156
	Repurchase of share capital			(164)			28			-			-			(136)
	Issuance of share capital			753			(230)			-			-			523
	Stock-based compensation			-			120			-			-			120
Balance as at March 31, 2011			$	19,960		$	2,001			-		$	3,036		$	24,997
Balance as at September 30, 2011			$	19,960		$	2,115			-		$	1,650		$	23,725
	Total comprehensive income for the period:
		Income for the period		-			-			-			387			387
		Effective portion of changes in fair value of cash flow hedges		-			-			168			-			168
				-			-			168			387			555
	Stock-based compensation			-			108			-			-			108
Balance as at March 31, 2012			$	19,960		$	2,223		$	168		$	2,037		$	24,388

RDM CORPORATION Condensed Consolidated Interim Statements of Cash Flows (Amounts in thousands of U.S. Dollars)
(Unaudited)
				Six months ended March 31
				2012			2011
Cash provided by (used in):
Operations:
Income for the period				$  387		$	1,156
	Items not involving cash:
		Depreciation of furniture and equipment		381			438
		Amortization of intangible assets		178			148
		Stock-based compensation		108			120
		Interest earned		(53)			(59)
		Exchange gains on cash held in foreign currency		(150)			(530)
Change in non-cash operating working capital				(125)			845
Cash provided by operations				726			2,118
Interest received				79			57
Net cash provided by operations				805			2,175
Financing:
	Issuance of share capital			-			524
	Repurchase of share capital			-			(138)
Cash provided by financing activities				-			386
Investing:
	Purchase of furniture and equipment			(244)			(105)
	Additions to intangible assets			(36)			(611)
Cash used in investing activities				(280)			(716)
Exchange gains on cash held in  foreign  currency				292			530
Increase in cash and cash equivalents				817			2,375
Cash and cash equivalents, beginning of period				14,815			13,798
Cash and cash equivalents, end of period				$15,632		$	16,173

 

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

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