RuggedCom reports record purchase orders and 25% revenue growth for Q1 Fiscal
2011
(All dollar amounts are in US dollars)
Highlights from the Quarter:
- 18% increase in Purchase Orders year over year, a new company record
- 25% increase in Revenue year over year
- 31% increase in Gross Margin year over year
- 36% increase in Net Income year over year
- Added 92 new customers
CONCORD, ON, Aug. 12 /CNW/ - RuggedCom Inc. ("RuggedCom") (TSX:RCM), a leading provider of rugged communications networking solutions designed for mission-critical applications in harsh environments, today announced its financial results for the first quarter of fiscal 2011, ended June 30, 2010.
"Sixty percent order growth in the transportation market was a significant factor in the Company delivering another record quarter in total booked orders." said Marzio Pozzuoli, President and Chief Executive Officer. "Revenues were positively impacted by a record quarter for both the electric power and transportation markets with strong gross margins also contributing to the quarter's performance."
First Quarter Results
Total revenue for the quarter was $20.0 million, representing an increase of 25% from the comparable quarter a year ago. Revenue growth was primarily driven by increased sales in the electric power and transportation markets, which grew 29% and 38% respectively, over the same quarter last year.
The Company booked record customer purchase orders totaling $21.2 million for the quarter, representing an increase of 18% over the same quarter last year.
Gross margin for the quarter was $11.9 million, an increase of 31% over the comparable period last year. On a percentage of revenue basis, first quarter gross margin was 59.7%, an increase of 3.0 percentage points over a gross margin of 56.7% for the same period last year.
First quarter net income was $1.2 million, a 36% increase over the comparable period a year ago. The increase was due to a combination of improved gross margins combined with favourable foreign exchange gains realized in the quarter as compared to foreign exchange losses incurred in the year ago period. The Company also recorded a provision for income taxes of $1.2 million for an effective tax rate of 49.7%. This compares to $0.6 million income tax expense in the same period last year with an effective tax rate of 38.8%.
First quarter basic earnings per share were $0.10 compared to $0.07 for the same quarter last year while fully diluted earnings per share were $0.10 compared to $0.07 for the same quarter last year.
The Company added 92 new customers in the quarter for a total of 451 customers placing orders in the quarter.
Conference Call and Webcast
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Management will host a conference call at 8:30 a.m. (ET) on Thursday, August 12, 2010. Listeners may attend the conference call by dialing 647-427-7450 or 1-888-231-8191. The live audio webcast can be accessed at RuggedCom's web site at www.RuggedCom.com. The webcast will also be archived on the site. A taped rebroadcast will be available to listeners following the call until 11:59 PM (ET) on August 19, 2010. To access the rebroadcast, please call 416-849-0833 or 1-800-642-1687 and enter passcode 88633501 followed by the number sign.
About RuggedCom Inc.
--------------------
RuggedCom is a leading provider of rugged communications networking solutions designed for mission-critical applications in harsh environments. RuggedCom's technology solutions include Ethernet switches, network routers, wireless devices, serial servers, media converters, software and professional services. RuggedCom's products are designed for use in harsh environments such as those found in electrical power substations and "Smart Grids", intelligent transportation systems, industrial process control and military applications. For further information, please visit www.RuggedCom.com.
The unaudited consolidated interim financial statements and management's discussion and analysis of the results of operations and financial condition for the three month periods ended June 30, 2010 and June 30, 2009 can be found under the Company's profile at www.sedar.com. They can also be found in the Investor Relations section of the Company's website at www.RuggedCom.com.
RuggedCom Inc.
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1st Quarter ended June 30, 2010
RuggedCom Inc.
CONSOLIDATED BALANCE SHEETS
(in thousands of United States dollars)
June 30, 2010 March 31, 2010
(unaudited) (audited)
$ $
- -
Assets
Current
Cash and cash equivalents (note 5) 32,878 33,140
Accounts receivable (note 6) 11,989 13,494
Prepaid expenses and other 1,854 1,825
Inventories (note 7) 11,381 10,497
Income taxes recoverable 240 1,036
Future income taxes 600 637
----------------------------
58,942 60,629
Future income taxes 222 431
Severance pay fund 498 520
Property and equipment 11,010 11,372
Goodwill (note 4) 1,839 1,928
Intangible assets 10,460 11,373
----------------------------
82,971 86,253
----------------------------
----------------------------
Liabilities
Current
Accounts payable and accrued liabilities 6,633 7,618
Current portion of warranty liability 486 604
Income taxes payable 97 280
Current portion of deferred income 24 99
Current portion of lease costs 57 26
Current portion of obligations under
capital leases 96 105
----------------------------
7,393 8,732
Warranty liability 400 413
Deferred income 40 32
Severance payable 534 558
Obligations under capital leases 70 95
Lease costs payable 260 265
----------------------------
8,697 10,095
----------------------------
Shareholders' Equity
Capital stock (note 8) 48,976 48,886
Contributed surplus (note 10) 2,907 2,538
Accumulated other comprehensive
income (loss) (note 9) 1,339 4,887
Retained earnings 21,052 19,847
----------------------------
22,391 24,734
----------------------------
74,274 76,158
----------------------------
82,971 86,253
----------------------------
----------------------------
See accompanying notes to consolidated interim financial statements.
RuggedCom Inc.
CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS
(in thousands of United States dollars except per share information)
3 month period 3 month period
ended June 30, ended June 30,
2010 2009
$ $
- -
Revenue 19,990 16,017
Cost of goods sold 8,064 6,940
-----------------------------
Gross margin 11,926 9,077
-----------------------------
Operating expenses
Research and development 2,918 2,025
Sales and marketing 3,989 2,978
General and administrative 2,401 1,953
Investment tax credits (499) (187)
Loss (gain) on foreign exchange (533) 531
Amortization 1,287 393
-----------------------------
9,563 7,693
-----------------------------
Operating income 2,363 1,384
Net interest income 31 63
-----------------------------
Income before income taxes 2,394 1,447
-----------------------------
Provision for income taxes (note 11)
Current 985 505
Future 204 57
-----------------------------
1,189 562
-----------------------------
Net income for the period 1,205 885
Retained earnings - Beginning of period 19,847 15,662
-----------------------------
Retained earnings - End of period 21,052 16,547
-----------------------------
-----------------------------
Net earnings per common share (note 13)
Basic $ 0.10 $ 0.07
Diluted $ 0.10 $ 0.07
Basic weighted average number of common
shares 12,147,149 11,896,306
Diluted weighted average number of common
shares 12,399,988 12,623,918
See accompanying notes to consolidated financial statements.
RuggedCom Inc.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands of United States dollars)
3 month period 3 month period
ended June 30, ended June 30,
2010 2009
$ $
- -
Net income for the period 1,205 885
Unrealized foreign currency translation
gain (loss) (note 9) (3,548) 4,570
-----------------------------
Comprehensive income for the period (2,343) 5,455
-----------------------------
-----------------------------
See accompanying notes to consolidated interim financial statements
RuggedCom Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of United States dollars)
3 month period 3 month period
ended June 30, ended June 30,
2010 2009
$ $
- -
Cash provided by (used in)
Operating activities
Net income for the period 1,205 885
Non-cash items
Amortization of property and equipment 654 302
Amortization of other assets 634 91
Future income taxes 204 57
Stock-based compensation 402 278
Warranty liability (89) 29
Lease costs 42 99
Net change in non-cash working capital
(note 12 (a)) (735) (3,899)
-----------------------------
2,317 (2,158)
-----------------------------
Investing activities
Additions to property and equipment (818) (553)
Additions to other assets (228) (652)
-----------------------------
(1,046) (1,205)
-----------------------------
Financing activities
Repayment of obligations under capital leases (26) (46)
Issuance of common shares 57 1,706
-----------------------------
31 1,660
-----------------------------
Effect of exchange rates on cash (1,563) 3,709
-----------------------------
Increase (decrease) in cash and cash
equivalents (261) 2,006
Cash and cash equivalents -
Beginning of period 33,140 45,099
-----------------------------
Cash and cash equivalents -
End of period (note 12(b)) 32,879 47,105
-----------------------------
-----------------------------
See accompanying notes to consolidated financial statements.
For further information: Roy Dalton, Chief Financial Officer, RuggedCom Inc., Tel: 905-856-5288, Email: [email protected]
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