RDM Corporation reports second quarter results
Toronto Stock Exchange Symbol: RC
WATERLOO, ON, May 1 /CNW/ - RDM Corporation (TSX: RC), a leading provider
of solutions for the electronic commerce and payment processing markets, today
reported its financial results for the three month period ended March 31,
2009.
Q2 2009 Highlights
- Total revenues were $5.8 million in the second quarter of fiscal
2009, compared to $6.8 million in the second quarter of 2008.
- Payment Processing Services segment revenues, which are recurring in
nature, were $2.6 million in Q2 2009, compared to $1.4 million a year
earlier.
- Transaction volumes for RDM's Image & Transaction Management System
(ITMS(R)) averaged 3.6 million items per week during the second
quarter, compared to 2.5 million items per week a year earlier, and
3.3 million items per week during Q1 2009.
- ITMS(R) end user locations grew from 15,900 to 17,000 during the
second quarter.
- RDM added three additional bank distributors and 12 new independent
sales organizations (ISOs) during the quarter.
- Gross profit was $2.6 million or 45% of revenues, compared to
$2.5 million or 37% of revenues in the second quarter of 2008.
- Net loss was $0.9 million or $0.04 per share (fully diluted) in Q2
2009 which was due largely to a $0.6 million foreign exchange loss.
This compares to a net loss of $0.3 million or $0.01 per share in Q2
2008.
- Operating activities generated $252,000 of positive cash flow, while
$652,000 of cash was used for capital expenditures and the repurchase
of shares. Cash and equivalents at March 31, 2009 were $16.9 million,
compared to $17.3 million at the end of the prior quarter.
"I am encouraged by the continued momentum of our recurring revenue ITMS
business," said Douglas Newman, President and CEO of RDM Corporation. "Despite
the difficult economic environment, our average transaction volumes and total
end user locations are both up nearly 50% compared to the prior year. We
recently reached an important milestone by processing one million transactions
in a single day."
Mr. Newman continued: "Overall results for the quarter were suppressed by
disappointing scanner sales caused by the economic downturn. We plan to be
prudent in managing our costs during this time of uncertainty, but our
priority is to position the Company to capitalize on the long-term remote
deposit capture opportunity, which I believe remains compelling."
Financial Review
RDM generated total revenues of $5.8 million in the three months ended
March 31, 2009, a decrease of $1.0 million from the second quarter of fiscal
2008. The strengthening of the U.S. dollar during the quarter resulted in a
$1.1 million favourable impact on reported revenues. Payment Processing
Services segment revenues increased by $1.2 million or 81% to $2.6 million,
driven by growth in ITMS transaction volumes and end users as well as the
change in currency exchange rates. Revenues in the Digital Imaging Products
segment decreased by $1.8 million to $2.4 million due to a reduction in
scanner shipments. The Electronic Payments Solutions segment and the Quality
Assurance segment, which represented a combined 13% of total revenues in the
second quarter, generated revenues of $0.5 million and $0.2 million,
respectively, compared to $0.8 million and $0.4 million, respectively, in the
second quarter of 2008.
Gross profit increased to $2.6 million in the second quarter of 2009 from
$2.5 million in the comparable period of fiscal 2008. Expressed as a
percentage of revenues, gross margin was 45%, compared to 37% in the Q2 2008.
Increased margins were due to the favourable impact of exchange rates and a
change in product mix to include a higher proportion of payment processing
recurring revenue. Gross profit in the Payment Processing Services segment
grew to $1.2 million in the second quarter from $465,000 a year earlier. The
segment generated an operating loss of $162,000, compared to a loss of
$655,000 in Q2 2008. This improvement in operating earnings was realized even
as the Company invested an additional $248,000 in sales and marketing efforts
focused on signing new ITMS banks and ISO resellers.
Total sales and marketing expense increased $70,000 to $1.2 million in Q2
2009, with efforts focused primarily on the rapidly growing Payment Processing
Services segment. Research and development expenses increased $149,000 to $1.1
million as the Company continued to invest in new product development. General
and administration expenses decreased $68,000 to $430,000.
RDM recognized a $563,000 foreign exchange loss in the second quarter of
2009, an increase of $350,000 compared to the amount recognized a year
earlier. The foreign exchange loss was due to the impact of a shift in
exchange rates during the quarter on forward contracts held by the Company as
economic hedges, partially offset by a gain in U.S. denominated monetary
assets.
Net loss was $865,000 in the second quarter of 2009, or $0.04 per share,
compared to a net loss of $269,000 or $0.01 per share a year earlier. RDM
repurchased 254,000 shares in the second quarter under its Normal Course
Issuer Bid. At March 31, 2009, the Company had 20.9 million common shares
outstanding.
Conference Call
RDM will be hosting a conference call to discuss the Company's second
quarter financial results on May 1, 2009 at 9:00 a.m. EDT. Dial-in numbers are
416-644-3419 or 1-800-731-6941. 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.
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 further 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 Balance Sheets
(Amounts In Canadian Dollars, In Thousands)
-------------------------------------------------------------------------
March September
31, 2009 30, 2008
Unaudited Audited
-------------------------------------------------------------------------
Assets:
Current assets:
Cash and cash equivalents $ 16,864 $ 17,421
Accounts receivable 4,811 4,929
Inventories 5,313 6,325
Investment tax credit receivable 1,669 1,703
Other 817 1,087
-------------------------------------------------------------------------
Total current assets 29,474 31,465
Furniture and equipment 3,176 2,893
Intangible assets 315 278
-------------------------------------------------------------------------
Total assets $ 32,965 $ 34,636
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Liabilities and shareholders' equity:
Current liabilities:
Accounts payable and accrued liabilities $ 5,915 $ 4,945
Deferred revenue 624 631
-------------------------------------------------------------------------
Total current liabilities 6,539 5,576
Future income tax liability 127 201
Shareholders' equity:
Share capital 28,005 28,338
Contributed surplus 1,419 1,162
Retained earnings (deficit) (3,125) (641)
-------------------------------------------------------------------------
Total shareholders' equity 26,299 28,859
-------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 32,965 $ 34,636
-------------------------------------------------------------------------
-------------------------------------------------------------------------
RDM CORPORATION
Consolidated Statements of Operations and Deficit
(Amounts in Canadian Dollars, In Thousands, Except Per Share Amounts)
Three months ended Six months ended
March March
2009 2008 2009 2008
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
-------------------------------------------------------------------------
Revenue $ 5,782 $ 6,823 $ 12,870 $ 13,894
Cost of revenue 3,209 4,286 7,341 8,700
-------------------------------------------------------------------------
Gross Profit 2,573 2,537 5,529 5,194
Operating expenses:
Sales and marketing 1,221 1,151 2,646 2,295
Research and development 1,094 945 2,165 1,959
General and administration 430 498 916 887
Depreciation and
amortization 62 61 122 116
Stock-based compensation 113 136 257 257
Foreign exchange loss
(gain) 563 213 2,011 284
Interest Income (45) (128) (104) (331)
-------------------------------------------------------------------------
3,446 2,876 8,013 5,476
-------------------------------------------------------------------------
Earnings (loss) before
income taxes (865) (339) (2,484) (273)
Future Income Tax expense
(recovery) - (70) - 5
-------------------------------------------------------------------------
Net earnings (loss) and
comprehensive earnings (loss) (865) (269) (2,484) (268)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Earnings (loss) per share
- basic and diluted $ (0.04) $ (0.01) $ (0.12) $ (0.01)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
RDM CORPORATION
Consolidated Statements of Cash Flows
(Amounts in Canadian Dollars, In Thousands)
Three months ended Six months ended
March March
2009 2008 2009 2008
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
-------------------------------------------------------------------------
Cash provided by (used in):
Operations:
Net earnings (loss)
Items not involving
cash: $ (865) $ (269) $ (2,484) $ (268)
Amortization of
furniture and equipment 237 165 449 344
Amortization of
intangible assets 11 11 23 19
Stock-based compensation 113 136 257 257
Future income taxes - (70) (74) (5)
Change in non-cash
operating working capital 756 489 2,397 1,173
-------------------------------------------------------------------------
Cash provided by (used in)
operations 252 462 568 1,520
Financing:
Issuance of share capital;
net of issue costs - 321 - 321
Repayment of share
purchase loans - 8 - 16
-------------------------------------------------------------------------
Cash provided by financing
activities - 329 - 337
Investing:
Repurchase of share capital (173) - (333) -
Purchase of furniture and
equipment (458) (883) (732) (1,367)
Additions to intangible
assets (21) (56) (60) (58)
-------------------------------------------------------------------------
Cash used in investing
activities (652) (939) (1,125) (1,425)
Increase (decrease) in cash
and cash equivalents (400) (148) (557) 432
Cash and cash equivalents,
beginning of period 17,264 17,998 17,421 17,418
-------------------------------------------------------------------------
Cash and cash equivalents,
end of period $ 16,864 $ 17,850 $ 16,864 $ 17,850
-------------------------------------------------------------------------
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For further information: Douglas Newman, President and CEO, RDM
Corporation, (519) 746-8483 ext. 340 phone, (519) 746-3317 fax,
dnewman@rdmcorp.com; James Merwin, CFO, RDM Corporation, (519) 746-8483 ext.
284 phone, (519) 746-3317 fax, jmerwin@rdmcorp.com
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