RDM Corporation Reports Third Quarter Financial Results

Payment Processing Services Revenue grows 15% year over year

Toronto Stock Exchange Symbol: RC

WATERLOO, ON, July 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 June 30, 2012. All figures are reported in U.S. dollars unless otherwise stated.

Q3 2012 Highlights

• Total revenue was $5.2 million in the third quarter of fiscal 2012, an increase of 8% from $4.8 million in Q3 2011, and up 3% from $5.0 million in the previous quarter.
  
  
• Payment Processing Services revenue was $3.0 million, an increase of 15% from $2. 6 million in Q3 2011, and an increase of 4% over the prior quarter.
  
  
• Gross profit was $2.7 million or 53% of revenues in Q3 2012, compared to $2.0 million or 42% of revenues in Q3 2011, and $2.5 million or 50% of revenues in the prior quarter.
  
  
• The Company added 972 new end user seats to bring its ITMS network to 27,506 seats, an increase of 32% from one year earlier and 4% compared to the prior quarter.
  
  
• EBITDA was $1.1 million in the third quarter of 2012, up from $421,000 a year earlier and $565,000 in the prior quarter.  EBITDA in Q3 2012 included $463,000 of non-recurring income.
  
  
• Net income was $728,000 or $0.03 per share in Q3 2012, compared to $151,000 or $0.01 per share in the third quarter of 2011, and $242,000 or $0.01 per share in the prior quarter.
  
  
• The Company generated $1.3 million in cash during the quarter and ended the period with a cash balance of $16.9 million.

"I am very pleased with our performance this quarter which was driven by continued growth in our transaction processing business," said Randy Fowlie, President and Chief Executive Officer of RDM Corporation.  "We delivered double-digit growth in Payment Processing Services revenue and added nearly 1,000 seats to our network. The market continues to show strong demand for our ITMS service.  Our overall gross margin percentage has improved by more than 10 points in the past year, leading to solid operating profit and bottom line performance in the quarter."

Conference Call

RDM will be hosting a conference call to discuss the Company's third quarter results on July 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)
			June 30, 2012		September 30,2011
Assets:
Current assets:
	Cash and cash equivalents	$	16,881	$	14,815
	Accounts receivable		3,333		2,799
	Inventories		2,584		3,455
	Investment tax credit receivable		391		520
	Prepaid and other assets		561		639
	Derivative assets		6		-
Total current assets			23,756		22,228
Investment tax credits			438		602
Furniture and equipment			2,109		2,455
Intangible assets			939		1,162
Total assets		$	27,242	$	26,447
Liabilities and shareholders' equity:
Current liabilities:
	Accounts payable and accrued liabilities	$	1,947	$	2,376
	Deferred revenue		275		279
	Derivative liabilities		-		67
Total current liabilities			2,222		2,722
Shareholders' equity:
	Share capital		19,960		19,960
	Contributed surplus		2,271		2,115
	Accumulated other comprehensive income		24		-
	Retained earnings		2,765		1,650
Total shareholders' equity			25,020		23,725
Total liabilities and shareholders' equity		$	27,242	$	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 June 30				Nine months ended June 30
			2012		2011		2012		2011
Revenue:
	Payment Processing Services	$	2,957	$	2,581	$	8,516	$	7,544
	Digital Imaging Products		2,241		2,213		6,235		8,972
			5,198		4,794		14,751		16,516
Cost of revenue			2,454		2,772		7,277		10,269
Gross profit			2,744		2,022		7,474		6,247
Operating expenses:
	Sales and marketing		859		784		2,559		2,484
	Research and development		1,003		882		2,948		2,667
	General and administration		516		437		1,573		1,711
			2,378		2,103		7,080		6,862
Results from operating activities			366		(81)		394		615
Other items:
	Foreign exchange gain (loss)		(66)		204		366		1,834
	Interest		25		28		77		87
	Other income		463		-		463		-
			422		232		906		1,921
Income before income taxes			788		151		1,300		1,306
Current income tax expense			60		-		185		-
Income for the period		$	728	$	151	$	1,115	$	1,306
Income per share  - basic and  diluted		$	0.03	$	0.01	$	0.05	$	0.06

RDM CORPORATION Condensed Consolidated Interim Statements of Comprehensive Income (Amounts in thousands of U.S. Dollars)
(Unaudited)
			Three months ended June 30				Nine months ended June 30
			2012		2011		2012		2011
Income for the period		$	728	$	151	$	1,115	$	1,306
Other comprehensive income:
	Effective portion of changes in fair value of cash flow hedges		(144)		-		24		-
Comprehensive income		$	584	$	151	$	1,139	$	1,306

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			-			-			-			1,306			1,306
	Repurchase of share capital			(164)			28			-			-			(136)
	Issuance of share capital			753			(230)			-			-			523
	Stock-based compensation			-			169			-			-			169
Balance as at June 30, 2011			$	19,960		$	2,050			-		$	3,186		$	25,196
Balance as at September 30, 2011			$	19,960		$	2,115			-		$	1,650		$	23,725
	Total comprehensive income for the period:
		Income for the period		-			-			-			1,115			1,115
		Effective portion of changes in fair value of cash flow hedges		-			-			24			-			24
				-			-			24			1,115			1,139
	Stock-based compensation			-			156			-			-			156
Balance as at June 30, 2012			$	19,960		$	2,271		$	24		$	2,765		$	25,020

RDM CORPORATION Condensed Consolidated Interim Statements of Cash Flows (Amounts in thousands of U.S. Dollars)
(Unaudited)
			Nine months ended June 30
			2012		2011
Cash provided by (used in):
Operations:
Income for the period		$	1,115	$	1,306
	Items not involving cash:
	Depreciation of furniture and equipment		591		658
	Amortization of intangible assets		268		225
	Stock-based compensation		156		169
	Interest earned		(77)		(87)
	Exchange gains on cash held in foreign currency		(453)		(770)
Change in non-cash operating working capital			202		(237)
Cash provided by operations			1,802		1,264
Interest received			119		87
Net cash provided by operations			1,921		1,351
Financing:
	Issuance of share capital		-		523
	Repurchase of share capital		-		(136)
Cash provided by financing activities			-		387
Investing:
	Purchase of furniture and equipment		(245)		(116)
	Additions to intangible assets		(45)		(944)
Cash used in investing activities			(290)		(1,060)
Exchange gains on cash held in  foreign  currency			435		770
Increase in cash and cash equivalents			2,066		1,448
Cash and cash equivalents, beginning of period			14,815		13,798
Cash and cash equivalents, end of period		$	16,881	$	15,246

 

SOURCE: RDM Corporation

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

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