RDM Corporation Reports Fiscal 2015 Third Quarter Financial Results

- Company increased Adjusted EBITDA by 39% year-over-year and generated cash from operations of $1.6 million -

WATERLOO, ON, July 23, 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 nine months ended June 30, 2015. All financial results are reported in thousands of U.S. dollars unless otherwise stated.

Q3 Fiscal 2015 Highlights (Unless otherwise noted, comparisons are made between Q3 fiscal 2015 and Q3 fiscal 2014)

  • Total revenue was $5,811 an increase of 4% compared to $5,568
  • Recurring Payment Processing revenue was $3,569, up 11% from $3,201
  • Total Payment Processing revenue was $3,698, an increase of 3% from $3,578
  • Digital Imaging revenue grew by 6% to $2,113 from $1,990
  • Gross margin was 62% compared to 56%
  • Operating income increased 61% to $1,154 from $717
  • Adjusted EBITDA was $1,516 compared to $1,093, an increase of 39%
  • The Company added 4,269 end user seats and exited the quarter with 44,046 seats, an increase of 11% from the prior quarter
  • The Company generated $1,634 in cash from operations and ended the quarter with $24,677 in cash and cash equivalents
  • One new financial institution selected RDM to replace existing RDC provider in the quarter

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

  • Total revenue increased 6% to $17,415 from $16,504
  • Recurring Payment Processing revenue grew 9% to $10,168 from $9,358
  • Total Payment Processing revenue was $10,639 compared to $10,718
  • Digital Imaging revenue grew by 17% to $6,776 from $5,786
  • Operating income increased to $3,230 compared to $2,086
  • Adjusted EBITDA improved 39% to $4,323 from $3,107
  • Net income grew 66% to $3,263 from $1,967
  • Generated $3,107 in cash from operations, compared to $1,331
  • Three new financial institutions selected RDM to replace existing RDC providers

"We had another strong quarter with growth in both our operating income and adjusted EBITDA," said Randy Fowlie, President and CEO of RDM Corporation. "The increase in both recurring Payment Processing revenue and Digital Imaging generated strong cash flows this quarter."

Dividend

A quarterly dividend of $0.015 per share will be paid on September 9, 2015 to shareholders of record on August 21, 2015. The dividends to be paid on September 9, 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 third quarter results on Thursday, July 23, 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 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

Condensed Consolidated Interim Balance Sheets

(Amounts in thousands of U.S. Dollars)








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









June 30, 2015



September 30, 2014

Assets:














Current assets:








Cash and cash equivalents

$

24,677



$

22,422


Accounts receivable


3,643




3,292


Unbilled revenue


121




124


Inventories


1,912




2,132


Investment tax credit receivable


100




188


Prepaid and other assets


816




807

Total current assets


31,269




28,965








Investment tax credits


-




270

Property and equipment


2,230




2,504

Intangible assets


748




771

Total assets

$

34,247



$

32,510








Liabilities and shareholders' equity:














Current liabilities:








Accounts payable and accrued liabilities

$

2,552



$

3,989


Deferred revenue


270




303

Total current liabilities


2,822




4,292








Shareholders' equity:








Share capital


21,106




20,512


Contributed surplus


2,609




2,535


Accumulated other comprehensive income


-




-


Retained earnings


7,710




5,171

Total shareholders' equity


31,425




28,218

Total liabilities and shareholders' equity

$

34,247



$

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
June 30



Nine months ended
June 30




2015



2014



2015



2014














Revenue:














Payment Processing Services


$

3,698


$

3,578


$

10,639


$

10,718


Digital Imaging Products



2,113



1,990



6,776



5,786




5,811



5,568



17,415



16,504

Cost of revenue



2,223



2,436



6,958



7,196

Gross profit



3,588



3,132



10,457



9,308














Operating expenses:














Sales and marketing



729



807



2,216



2,295


Research and development



1,129



1,146



3,435



3,378


General and administration



576



462



1,576



1,549




2,434



2,415



7,227



7,222














Operating income



1,154



717



3,230



2,086














Other items:














Foreign exchange gain (loss)



(7)



(17)



(22)



76


Interest income



18



12



49



30


Other income (expense)



451



(153)



571



(153)




462



(158)



598



(47)














Income before income taxes



1,616



559



3,828



2,039

Current income tax expense



265



24



565



72

Net income


$

1,351


$

535


$

3,263


$

1,967














Earnings per share – basic and diluted


$

0.06


$

0.03


$

0.15


$

0.09














Weighted average common shares














outstanding during the period



22,024,976



21,589,226



21,836,851



21,485,476

 

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
June 30




Nine months ended
June 30






2015




2014




2015




2014



















Net income



$


1,351


$


535


$


3,263


$


1,967



















Other comprehensive income:



















Effective portion of changes in fair




















value of cash flow hedges





85




-




-




-

Comprehensive income



$


1,436


$


535


$


3,263


$


1,967

 

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



-



-



-



1,967




1,967



Effective portion of changes in
fair value of cash flow hedges



-



-



(29)



-




(29)



















Issuance of share capital



383



(98)



-



-




285


Dividends paid



-



-



-



(395)




(395)




20,483



2,347



-



4,494




27,324


Stock-based compensation



-



102



-



-




102

Balance as at June 30, 2014


$

20,483


$

2,449


$

-


$

4,494


$


27,426


















Balance as at September 30, 2014


$

20,512


$

2,535


$

-


$

5,171


$


28,218


Total comprehensive income for
the period:



















Net income



-



-



-



3,263




3,263



Effective portion of changes in
fair value of cash flow hedges



-



-



-



-




-



















Issuance of share capital



594



(241)



-



-




353


Dividends paid



-



-



-



(724)




(724)




594



(241)






2,539




2,892


Stock–based compensation



-



315



-



-




315

Balance as at June 30, 2015


$

21,106


$

2,609


$

-


$

7,710


$


31,425

 

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)








Nine months ended June 30



2015




2014









Cash provided by (used in):
















Operations:








Net income

$


3,263


$


1,967


Items not involving cash:










Current income tax expense



565




72



Depreciation of property and equipment



514




567



Amortization of intangible assets



264




352



Write-down of property and equipment



-




7



Stock-based compensation



315




102



Interest earned



(49)




(12)

Change in non-cash operating working capital



(1,805)




(1,733)

Cash provided by operations



3,067




1,322

Interest received



40




9

Net cash provided by operating activities



3,107




1,331









Financing:









Issuance of share capital



353




285


Dividends paid



(724)




(395)

Cash used in by financing activities



(371)




(110)









Investing:









Purchase of property and equipment



(240)




(1,278)


Additions to intangible assets



(241)




(537)

Cash used in investing activities



(481)




(1,815)









Increase (decrease) in cash and cash equivalents



2,255




(594)

Cash and cash equivalents, beginning of period



22,422




20,126

Cash and cash equivalents, end of period

$


24,677


$


19,532

 

RDM CORPORATION

Reconciliation of Adjusted EBITDA to Income for the period

(Amounts in thousands of U.S. Dollars)









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





Three months ended
June 30



Nine months ended
June 30





2015



2014



2015



2014

Net income



$

1,351


$

535


$

3,263


$

1,967

Income tax expense




265



24



565



72

Interest income




(18)



(12)



(49)



(30)

Depreciation and amortization




259



327



778



919

Foreign exchange loss (gain)




7



17



22



(76)

Stock-based compensation




103



49



315



102

Other expense (income)




(451)



153



(571)



153

Adjusted EBITDA



$

1,516


$

1,093


$

4,323


$

3,107

 

SOURCE RDM Corporation

For further information: 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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