RUGGEDCOM REPORTS RECORD PURCHASE ORDERS AND REVENUES FOR Q2 FISCAL 2011

(All dollar amounts are in US dollars)

Highlights from the Quarter:

• 18% increase in Purchase Orders year over year, to $22.2 million, a new company record
• 30% increase in Revenue year over year, to $21.7 million, a new company record
• 34% increase in Gross Margin year over year
• 36% increase in Net Income year over year
• Added 108 new customers

CONCORD, ON, Nov. 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 second quarter of fiscal 2011, ended September 30, 2010.

"I'm pleased to report that our second quarter included another record performance for both orders and revenues." said Marzio Pozzuoli, President and Chief Executive Officer.  "Contributing to this quarter's solid performance was a 60% increase in revenue in our transportation market, a new company record.  New record marks for revenue were also established in our electric power market and as well, in the Asia-Pacific region."

Second Quarter Results

Total revenue for the quarter was $21.7 million, representing an increase of 30% from the comparable quarter a year ago.  This record revenue was primarily driven by the electric power and transportation markets, which grew 31% and 60% respectively, over the same quarter last year.

The Company booked record customer purchase orders totaling $22.2 million for the quarter, representing an increase of 18% over the same quarter last year. 

Gross margin for the quarter was $13.2 million, an increase of 34% over the comparable period last year.  On a percentage of revenue basis, second quarter gross margin was 61.0%, an increase of 1.9 percentage points over a gross margin of 59.1% for the same period last year. 

Second quarter net income was $1.4 million, a 36% increase over the comparable period a year ago.  In percentage terms, operating expenses grew at roughly the same rate as revenues, with an increase in our gross margin percentage partially contributing to the increase in net income.  The quarter's operating expenses included foreign exchange losses of approximately $0.5 million compared with approximately $1.0 million in the same period a year ago.  The Company also recorded a provision for income taxes of $1.0 million for an effective tax rate of 41.7%.  This compares to $0.5 million income tax expense in the same period last year with an effective tax rate of 35.2%.   

Second quarter basic earnings per share were $0.11 compared to $0.08 for the same quarter last year while fully diluted earnings per share were $0.11 compared to $0.08 for the same quarter last year. 

The Company added 100 new customers in the quarter for a total of 476 customers placing orders in the quarter.

Conference Call and Webcast
Management will host a conference call at 8:30 a.m. (ET) on Friday, November 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 November 19, 2010. To access the rebroadcast, please call 416-849-0833 or 1-800-642-1687 and enter passcode 18744296#.

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 September 30, 2010 and September 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
2nd Quarter ended September 30, 2010
RuggedCom Inc.
CONSOLIDATED BALANCE SHEETS
(in thousands of United States dollars)
				September 30, 2010	March  31, 2010
				(unaudited)	(audited)
				$	$
Assets
Current
Cash and cash equivalents (note 5)				35,157	33,140
Accounts receivable (note 6)				13,600	13,494
Prepaid expenses and other				1,629	1,825
Inventories (note 7)				13,210	10,497
Income taxes recoverable				-	1,036
Future income taxes				622	637
				64,218	60,629
Future income taxes				-	431
Severance pay fund				527	520
Property and equipment				11,015	11,372
Goodwill  (note 4)				1,903	1,928
Intangible assets				10,368	11,373
				88,031	86,253
Liabilities
Current
Accounts payable and accrued liabilities				6,911	7,618
Current portion of warranty liability				434	604
Income taxes payable				466	280
Current portion of deferred income				25	99
Current portion of lease costs				45	26
Current portion of obligations under capital leases				92	105
				7,973	8,732
Future income taxes				76	-
Warranty liability				408	413
Deferred income				40	32
Severance payable				566	558
Obligations under capital leases				52	95
Lease costs payable				276	265
				9,391	10,095
Shareholders' Equity
Capital stock (note 8)				49,004	48,886
Contributed surplus (note 10)				3,296	2,538
Accumulated other comprehensive income (loss) (note 9)				3,924	4,887
Retained earnings				22,416	19,847
				26,340	24,734
				78,640	76,158
				88,031	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 ended September 30, 2010	3 month period ended September 30, 2009	6 month period ended September 30, 2010	6 month period ended September 30, 2009
		$	$	$	$
Revenue		21,692	16,740	41,682	32,757
Cost of goods sold		8,470	6,847	16,534	13,787
Gross margin		13,222	9,893	25,148	18,970
Operating expenses
Research and development		2,865	1,780	5,783	3,805
Sales and marketing		3,945	3,485	7,934	6,463
General and administrative		2,425	1,808	4,826	3,761
Investment tax credits		(82)	(199)	(581)	(386)
Loss on foreign exchange		541	998	8	1,529
Amortization		1,266	508	2,553	901
		10,960	8,380	20,523	16,073
Operating income		2,262	1,513	4,625	2,897
Net interest income		78	38	109	101
Income before income taxes		2,340	1,551	4,734	2,998
Provision for income taxes (note 11)
Current		676	492	1,661	997
Future		300	54	504	111
		976	546	2,165	1,108
Net income for the period		1,364	1,005	2,569	1,890
Retained earnings — Beginning of period		21,052	16,547	19,847	15,662
Retained earnings — End of period		22,416	17,552	22,416	17,552
Net earnings per common share (note 13)
Basic		$            0.11	$            0.08	$              0.21	$              0.16
Diluted		$            0.11	$            0.08	$              0.21	$              0.15
Basic weighted average number of common shares outstanding		12,157,529	12,098,002	12,152,367	11,997,705
Diluted weighted average number of common shares outstanding		12,474,096	12,574,050	12,437,070	12,599,535
See accompanying notes to consolidated interim financial statements.
RuggedCom Inc.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands of United States dollars )
		3 month period ended September 30, 2010	3 month period ended September 30, 2009	6 month period ended September 30, 2010	6 month period ended September 30, 2009
		$	$	$	$
Net income for the period		1,364	1,005	2,569	1,890
Unrealized foreign currency translation gain (loss) (note 9)		2,585	5,423	(963)	9,993
Comprehensive income for the period		3,949	6,428	1,606	11,883
See accompanying notes to consolidated interim financial statements.
RuggedCom Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of United States dollars)
		3 month period ended September 30, 2010	3 month period ended September 30, 2009	6 month period ended September 30, 2010	6 month period ended September 30, 2009
		$	$	$	$
Cash provided by (used in)
Operating activities
Net income for the period		1,364	1,005	2,569	1,890
Non-cash items
	Amortization of property and equipment	704	263	1,358	565
	Amortization of other assets	562	244	1,196	335
	Future income taxes	300	54	504	111
	Stock-based compensation	397	294	799	572
	Warranty liability	(73)	1	(162)	30
	Lease costs	(8)	65	34	164
Net change in non-cash working capital (note 12 (a))		(1,667)	884	(2,402)	(3,015)
		1,579	2,810	3,896	652
Investing activities
Acquisition of subsidiary (note 4)		-	(7,970)	-	(7,970)
Additions to property and equipment		(309)	(2,327)	(1,128)	(2,880)
Additions to other assets		(135)	(343)	(363)	(995)
		(444)	(10,640)	(1,491)	(11,845)
Financing activities
Repayment of obligations under capital leases		(26)	(46)	(52)	(92)
Repayment of loan (note 4)		-	(4,875)	-	(4,875)
Issuance of common shares		19	31	76	1,737
		(7)	(4,890)	24	(3,230)
Effect of exchange rates on cash		1,151	3,870	(412)	7,579
Increase (decrease) in cash and cash equivalents during the period		2,279	(8,850)	2,017	(6,844)
Cash and cash equivalents — Beginning of period		32,878	47,105	33,140	45,099
Cash and cash equivalents — End of period (note 12(b))		35,157	38,255	35,157	38,255
See accompanying notes to consolidated interim financial statements.

For further information:

Roy Dalton
Chief Financial Officer
RuggedCom Inc.
Tel:   [phone]
Email:  [email protected]