RDM Corporation Reports Fiscal 2015 Second Quarter Financial Results

Revenue and Adjusted EBITDA up 11% and 50% year-over-year, respectively

WATERLOO, ON, April 30, 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 three and six-months ended March 31, 2015. All financial results are reported in thousands of U.S. dollars unless otherwise stated.

Q2 Fiscal 2015 Highlights (Unless otherwise noted, comparisons are made between Q2 fiscal 2015 and Q2 fiscal 2014)

  • Total revenue increased 11% to $5,758 from $5,185
  • Recurring Payment Processing revenue improved 9% to $3,356 from $3,091
  • Total Payment Processing revenue was $3,544 compared to $3,615
  • Digital Imaging revenue grew by 41% to $2,214 from $1,570
  • Operating income increased 68% to $1,059 compared to $628
  • Adjusted EBITDA improved 50% to $1,431 from $952
  • Net income grew 21% to $789 from $652
  • Generated $621 in cash from operations, ending the quarter with $23,436 in cash and cash equivalents
  • Added 1,710 new end-user seats bringing RDM's ITMS network to a total of 39,777 seats, an increase of 15% year-over-year and 4% over the prior quarter
  • Two new financial institutions selected RDM to replace existing RDC providers in the quarter
  • The Board of Directors declared a quarterly cash dividend of $0.015 per share

Year-to-date Highlights (Unless otherwise noted, comparisons are made between year-to-date fiscal 2015 and fiscal 2014)

  • Total revenue increased 6% to $11,604 from $10,936
  • Recurring Payment Processing revenue grew 7% to $6,599 from $6,157
  • Total Payment Processing revenue was $6,941 compared to $7,140
  • Digital Imaging revenue grew by 23% to $4,663 from $3,796
  • Operating income increased 52% to $2,076 compared to $1,369
  • Adjusted EBITDA improved 39% to $2,807 from $2,014
  • Net income grew 34% to $1,912 from $1,432
  • Generated $1,473 in cash from operations, up 25% from $1,182

"Growth in both our recurring Payment Processing and Digital Imaging revenue translated into increased profitability in the quarter. In addition, we continue to see evidence of strong market acceptance this quarter with two new financial institutions selecting RDM to replace existing RDC providers," said Randy Fowlie, President and CEO of RDM Corporation. "One is a top 30 US bank and the other is a large international bank. We look forward to partnering with these two new customers going forward."

Dividend

A quarterly dividend of $0.015 per share will be paid on June 8, 2015 to shareholders of record on May 25, 2015. The dividends to be paid on May 25, 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 2015 second quarter results on Thursday, April 30, 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 for 14 days 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 are 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. Adjusted EBITDA and operating income do 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 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
Condensed Consolidated Interim Balance Sheets
(Amounts in thousands of U.S. Dollars)

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







March 31, 2015


September 30, 2014

Assets:










Current assets:






Cash and cash equivalents

$

23,436

$

22,422


Accounts receivable


3,755


3,292


Unbilled revenue


123


124


Inventories


1,744


2,132


Investment tax credit receivable


218


188


Prepaid and other assets


781


807

Total current assets


30,057


28,965






Investment tax credits


-


270

Property and equipment


2,273


2,504

Intangible assets


839


771

Total assets

$

33,169

$

32,510






Liabilities and shareholders' equity:










Current liabilities:






Accounts payable and accrued liabilities

$

2,642

$

3,989


Deferred revenue


288


303


Derivative liability


85


-

Total current liabilities


3,015


4,292






Shareholders' equity:






Share capital


21,106


20,512


Contributed surplus


2,506


2,535


Accumulated other comprehensive income


(85)


-


Retained earnings


6,627


5,171

Total shareholders' equity


30,154


28,218

Total liabilities and shareholders' equity

$

33,169

$

32,510

 

RDM CORPORATION
Condensed Consolidated Interim 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


Six months ended



March 31


March 31



2015


2014


2015


2014










Revenue:










Payment Processing Services

$

3,544

$

3,615

$

6,941

$

7,140


Digital Imaging Products


2,214


1,570


4,663


3,796



5,758


5,185


11,604


10,936

Cost of revenue


2,322


2,096


4,735


4,760

Gross profit


3,436


3,089


6,869


6,176










Operating expenses:










Sales and marketing


737


722


1,487


1,488


Research and development


1,143


1,176


2,306


2,232


General and administration


497


563


1,000


1,087



2,377


2,461


4,793


4,807










Operating income


1,059


628


2,076


1,369










Other items:










Foreign exchange gain (loss)


(31)


39


(15)


93


Interest income


16


9


31


18


Other income


-


-


120


-



(15)


48


136


111










Income before income taxes


1,044


676


2,212


1,480

Current income tax expense


255


24


300


48

Net income

$

789

$

652

$

1,912

$

1,432










Earnings per share – basic and diluted

$

0.04

$

0.03

$

0.09

$

0.07










Weighted average common shares







outstanding during the period


21,849,351

21,500,976

21,836,851

21,445,976

 

RDM CORPORATION
Condensed Consolidated Interim Statements of Comprehensive Income
(Amounts in thousands of U.S. Dollars)


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








Three months ended


Six months ended



March 31


March 31



2015


2014


2015


2014










Net income

$

789

$

652

$

1,912

$

1,432










Other comprehensive income:










Effective portion of changes in fair











value of cash flow hedges


(38)


64


(85)


-

Comprehensive income

$

751

$

716

$

1,827

$

1,432

 

RDM CORPORATION
Condensed Consolidated Interim 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 September 30, 2013

$

20,100

$

2,445

$

29

$

2,922

$

25,496


Total comprehensive income for the period:













Net income


-


-


-


1,432


1,432



Effective portion of changes in fair value of cash flow hedges


-


-


(29)


-


(29)













Issuance of share capital


266


(56)


-


-


210


Dividends paid


-


-


-


(195)


(195)



20,366


2,389


-


4,159


26,914


Stock-based compensation


-


53


-


-


53

Balance as at March 31, 2014

$

20,366

$

2,442

$

-

$

4,159

$

26,967












Balance as at September 30, 2014

$

20,512

$

2,535

$

-

$

5,171

$

28,218


Total comprehensive income for the period:













Net income


-


-


-


1,912


1,912



Effective portion of changes in fair value of cash flow hedges


-


-


(85)


-


(85)













Issuance of share capital


594


(241)


-


-


353


Dividends paid


-


-


-


(456)


(456)



21,106


2,294


(85)


6,627


29,942


Stock–based compensation


-


212


-


-


212

Balance as at March 31, 2015

$

21,106

$

2,506

$

(85)

$

6,627

$

30,154

 

RDM CORPORATION
Condensed Consolidated Interim Statements of Cash Flows
(Amounts in thousands of U.S. Dollars)

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





Six months ended March 31


2015


2014






Cash provided by (used in):










Operations:





Net income

$

1,912

$

1,432


Items not involving cash:







Current income tax expense


300


48



Depreciation of furniture and equipment


357


338



Amortization of intangible assets


162


254



Write-down of property and equipment


-


7



Stock-based compensation


212


53



Interest earned


(31)


(9)

Change in non-cash operating working capital


(1,470)


(950)

Cash provided by operations


1,442


1,173

Interest received


31


9

Net cash provided by (used in) operation activities


1,473


1,182

 

Financing:






Issuance of share capital


353


210


Dividends paid


(456)


(195)

Cash provided by (used in) financing activities


(103)


15






Investing:






Purchase of furniture and equipment


(126)


(679)


Additions to intangible assets


(230)


(517)

Cash used in investing activities


(356)


(1,196)






Increase in cash and cash equivalents


1,014


1

Cash and cash equivalents, beginning of period


22,422


20,126

Cash and cash equivalents, end of period

$

23,436

$

20,127

 

RDM CORPORATION
Reconciliation of Adjusted EBITDA to Income for the period
(Amounts in thousands of U.S. Dollars)

In thousands of U.S. dollars









Three months ended


Six months ended



March 31


March 31



2015


2014


2015


2014

Net income

$

789

$

652

$

1,912

$

1,432

Income tax expense


255


24


300


48

Interest income


(16)


(9)


(31)


(18)

Depreciation and amortization


267


296


519


592

Foreign exchange loss (gain)


31


(39)


15


(93)

Stock-based compensation


105


28


212


53

Other income


-


-


(120)


-

Adjusted EBITDA

$

1,431

$

952

$

2,807

$

2,014

 

SOURCE RDM Corporation

For further information: Contacts: Randy Fowlie, Chief Executive Officer & President, RDM Corporation, (519) 746-8483 x 340, RFowlie@rdmcorp.com; Rui Malhinha, Chief Financial Officer, RDM Corporation, (519) 746-8483 x 284,RMalhinha@rdmcorp.com


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