RDM Corporation Reports Fiscal 2015 Fourth Quarter and Year-End Financial Results

- Company delivers top-line growth, expanded margins and increased profitability - 

WATERLOO, ON, Nov. 19, 2015 /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 fourth quarter and fiscal year ended September 30, 2015. All financial results are reported in thousands of U.S. dollars unless otherwise stated.

Fiscal 2015 Highlights (Unless otherwise noted, comparisons are made between fiscal 2015 and fiscal 2014)

  • Total revenue was $23,530 an increase of 4% compared to $22,689
  • Recurring Payment Processing revenue was $13,759, up 9% from $12,579
  • Total Payment Processing revenue was $14,295, an increase of $59 from $14,236
  • Digital Imaging revenue grew by 9% to $9,235 from $8,453
  • Gross margin was 61% up from 56%
  • Operating income increased 55% to $4,560 from $2,946
  • Adjusted EBITDA was $6,002, up 41% from $4,271
  • Net income was $5,326, up from $2,845
  • The Company added 7,641 end user seats during the year and exited fiscal 2015 with 44,621 seats, an increase of 21% over fiscal 2014
  • Generated $5,271 in cash from operations compared to $4,422, and ended the year with $26,405 in cash and cash equivalents
  • Three financial institutions selected RDM to replace their existing RDC provider

Q4 Fiscal Highlights (Unless otherwise noted, comparisons are made between Q4 fiscal 2015 and Q4 2014)

  • Total revenue was $6,115 compared to $6,185
  • Recurring Payment Processing revenue was $3,591, up 11% from $3,221
  • Total Payment Processing revenue increased 4% to $3,656 from $3,518
  • Digital Imaging revenue was $2,459 compared to $2,667
  • Gross margin was 62% up from 53%
  • Operating income increased 55% to $1,330 compared to $860
  • Adjusted EBITDA improved 47% to $1,679 from $1,165
  • Net income grew 135% to $2,063 from $878
  • Generated $2,164 in cash from operations compared to $3,091

"We are very pleased with our full year operating performance for fiscal 2015. We grew both our recurring Payment Processing revenue base and our Digital Imaging business 9%," said Randy Fowlie, President and CEO of RDM Corporation. "This combination resulted in outstanding financial results for the year. Adjusted EBITDA is up 41% and cash flow from operations was strong. We won three new contracts with financial institutions during the year and look forward to continued success in 2016."

Dividend

A quarterly dividend of $0.015 per share will be paid on December 18, 2015 to shareholders of record on December 4, 2015. The dividends to be paid on December 18, 2015 are designated as "eligible dividends" for the purpose of section 89 of the Income Tax Act (Canada).

Conference Call

RDM will be hosting a conference call to discuss the Company's fiscal 2015 fourth quarter and year-end results on Thursday, November 19, 2015 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 ("MD&A") will be filed on www.sedar.com.

Non-IFRS Measures

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization adjusted for foreign exchange gains and losses, stock-based compensation and one-time charges) and operating income do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies.  Adjusted EBITDA is provided to assist management and investors in determining the Company's approximate operating cash flow before interest, income taxes, and depreciation and amortization, foreign exchange, stock-based compensation and one-time charges. Management believes that RDM shareholders and potential investors in RDM use non-IFRS financial measures such as adjusted EBITDA and operating income in making investment decisions about the Company and measuring the operational results.

About RDM Corporation

RDM Corporation provides large financial institutions with Remote Deposit Capture (RDC) solutions designed to help their clients simplify the way they do business. RDM processes over $600 billion in payments annually and helps financial institutions increase revenue, expand market share and improve customer service for over 80,000 end users.

Four of the top ten financial institutions in the United States use RDM's payment processing solutions. RDM serves 31 percent of the top 100 Fortune 500 companies including brokerage firms, big-box retailers, healthcare and insurance providers, and government entities. Working with clients for over 25 years, RDM provides both software and hardware solutions including web-based and mobile RDC, and manufactures a wide range of digital imaging scanners. For more information, visit www.rdmcorp.com.

Forward-looking statements

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 thousands of U.S. Dollars)






(Not audited or reviewed by the Company's external auditor)



As at September 30

2015

2014

Assets:






Current assets:




Cash and cash equivalents

$

26,405

$

22,422


Accounts receivable

3,598

3,292


Unbilled revenue

48

124


Inventories

1,821

2,132


Investment tax credit receivable

130

188


Prepaid and other assets

836

807

Total current assets

32,838

28,965




Investment tax credits

1,586

270

Property and equipment

1,910

2,504

Intangible assets

701

771

Total assets

$

37,035

$

32,510




Liabilities and shareholders' equity:






Current liabilities:




Accounts payable and accrued liabilities

$

2,869

$

3,989


Deferred revenue

282

303

Total current liabilities

3,151

4,292




Deferred income taxes

561

-




Shareholders' equity:




Share capital

21,106

20,512


Contributed surplus

2,697

2,535


Retained earnings

9,520

5,171

Total shareholders' equity

33,323

28,218

Total liabilities and shareholders' equity

$

37,035

$

32,510






RDM CORPORATION



Consolidated Statements of Income



(Amounts in thousands of U.S. Dollars, except per share data)





(Not audited or reviewed by the Company's external auditor)



      Three months ended

       September 30

    Years ended
     September 30


2015

2014

2015

2014






Revenue:






Payment Processing Services

$

3,656

$

3,518

$

14,295

$

14,236


Digital Imaging Products

2,459

2,667

9,235

8,453


6,115

6,185

23,530

22,689

Cost of revenue

2,326

2,878

9,284

10,074

Gross profit

3,789

3,307

14,246

12,615






Operating expenses:






Sales and marketing

658

843

2,874

3,138


Research and development

1,216

1,062

4,651

4,440


General and administration

585

542

2,161

2,091


2,459

2,447

9,686

9,669






Income from operations

1,330

860

4,560

2,946






Other items:






Foreign exchange gain

56

31

34

107


Interest income

21

11

70

41


Other income (expense)

1,590

-

2,161

(153)


1,667

42

2,265

(5)






Net income before income taxes

2,997

902

6,825

2,941

Income tax expense






Current

373

24

938

96


Deferred

561

-

561

-


934

24

1,499

96

Net income for the period

 

$

2,063

 

$

878

$

5,326

$

2,845






Earnings per share – basic and diluted

$

0.09

$

0.04

$

0.24

$

0.13




RDM CORPORATION



Consolidated Statements of Comprehensive Income



(Amounts in thousands of U.S. Dollars)






(Not audited or reviewed by the Company's external auditor)



       Three months ended

        September 30

        Years ended

        September 30


2015

2014

2015

2014






Net income for the period

$

2,063

$

878

$

5,326

$

2,845






Other comprehensive income:






Effective portion of changes in fair value of cash flow hedges

-

-

-

(29)

Comprehensive income

$

2,063

$

878

$

5,326

$

2,816







RDM CORPORATION






Consolidated Statements of Changes in Shareholders' Equity






(Amounts in thousands of U.S. Dollars)












(Not audited or reviewed by the Company's external auditor)







 

 

Share

capital

 

 

Contributed

surplus

Accumulated

other

comprehensive

income

 

 

Retained

earnings

 

 

 

Total

Balance as at October 1, 2013

$

20,100

$

2,445

$

29

$

2,922

$

25,496


Total comprehensive income for the year:








Net income for the year

-

-

-

2,845

2,845



Effective portion of changes in fair value of cash flow hedges

-

-

(29)

-

(29)








Issuance of share capital

412

(108)

-

-

304


Dividends paid

-

-

-

(596)

(596)


20,512

2,337

-

5,171

28,020


Stock-based compensation

-

198

-

-

198

Balance as at September 30, 2014

$

20,512

$

2,535

$

-

$

5,171

$

28,218







Balance as at September 30, 2014

$

20,512

$

2,535

$

-

$

5,171

$

28,218


Total comprehensive income for the year:








Net income for the year

-

-

-

5,326

5,326



Effective portion of changes in fair value of cash flow hedges

-

-

-

-

-








Issuance of share capital

594

(241)

-

-

353


Dividends paid

-

-

-

(977)

(977)


594

(241)

-

4,349

4,702


Stock–based compensation

-

403

-

-

403

Balance as at September 30, 2015

$

21,106

$

2,697

$

-

$

9,520

$

33,323




RDM CORPORATION



Consolidated Statements of Cash Flows



(Amounts in thousands of U.S. Dollars)






(Not audited or reviewed by the Company's external auditor)



Years ended September 30

2015

2014




Cash provided by (used in):






Operations:



Net income for the period

$

5,326

$

2,845


Items not involving cash:





Current income tax expense

938

96



Deferred income tax expense

561

-



Depreciation of property and equipment

681

772



Amortization of intangible assets

358

355



Loss on disposal of property and equipment

289

-



Stock-based compensation

403

198



Interest earned

(70)

(41)

Change in non-cash operating working capital

(3,278)

162

Cash provided by operations

5,208

4,387

Interest received

63

35

Net cash provided by operating activities

5,271

4,422

Financing:




Issuance of share capital

353

304


Dividends paid

(977)

(596)

Cash used in financing activities

(624)

(292)




Investing:




Purchase of property and equipment

(376)

(1,290)


Additions to intangible assets

(288)

(544)

Cash used in investing activities

(664)

(1,834)




Increase in cash and cash equivalents

3,983

2,296

Cash and cash equivalents, beginning of period

22,422

20,126

Cash and cash equivalents, end of period

$

26,405

$

22,422




RDM CORPORATION

Reconciliation of Adjusted EBITDA to Income (loss) for the period

(Amounts in thousands of U.S. Dollars)


(Not audited or reviewed by the Company's external auditor)


Three months ended

September 30

Years ended

September 30


2015

2014

2015

2014

Net income for the period

$

2,063

$

878

$

5,326

$

2,845

Income tax expense

934

24

1,499

96

Interest income

(21)

(11)

(70)

(41)

Depreciation and amortization

261

208

1,039

1,127

Foreign exchange (gain) loss

(56)

(30)

(34)

(107)

Stock-based compensation

88

96

403

198

Other (income) expense

(1,590)

-

(2,161)

153

Adjusted EBITDA for the period

$

1,679

$

1,165

$

6,002

$

4,271






Other (income) expense is comprised of:





Three months ended

September 30

Years ended

September 30

Years ended September 30

2015

2014

2015

2014

Change in estimated royalties

$

-

$

-

$

(266)

$

-

Recognition of investment tax credits

(1,879)

-

(2,064)

-

Change in settlement claim

-

-

(120)

-

Loss on disposal

289

-

289

-

Obligation for future payments

-

-

-

153

Other (income) expense

$

(1,590)

$

-

$

(2,161)

$

153

 

SOURCE RDM Corporation

For further information: Contacts: Randy Fowlie, President & CEO, RDM Corporation, (519) 746-8483 x340, rfowlie@rdmcorp.com; Rui Malhinha, Chief Financial Officer, RDM Corporation, (519) 746-8483 x284, rmalhinha@rdmcorp.com


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