RDM Corporation Reports Fiscal 2016 First Quarter Financial Results

- Recurring revenue increases 15% and now represents 69% of total revenue -

WATERLOO, ON, Jan. 28, 2016 /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 first quarter fiscal 2016 ended December 31, 2015. All financial results are reported in thousands of U.S. dollars unless otherwise stated.

"This quarter we continued the successful transition to a recurring revenue business model with recurring revenue representing 69% of total revenue," said Randy Fowlie, President and CEO of RDM Corporation. "Recurring revenue increased 15%, operating income increased 43% and Adjusted EBITDA increased 28%. This is a testament to the success of our business model. In addition, the Board of Directors declared a quarterly dividend of $0.02, which is a 33% increase over the current dividend."

Q1 Fiscal 2016 Highlights (Unless otherwise noted, comparisons are made between Q1 fiscal 2016 and Q1 fiscal 2015)

  • Total revenue was $5,429 compared to $5,846
  • Recurring Payment Processing revenue was $3,740, up 15% from $3,243
  • Total Payment Processing revenue was $3,840, a 13% increase from $3,397
  • Digital Imaging revenue was $1,589 compared to $2,449
  • Gross margin was 67% up from 59%
  • Operating income increased 43% to $1,450 from $1,017
  • Adjusted EBITDA was $1,761, up 28% from $1,376
  • Net income was $1,026 compared to $1,123
  • End user seats were 45,456 seats, a 19% increase over Q1 fiscal 2015
  • Generated $1,415 in cash from operations, up 66% compared to $852, and ended the quarter with $27,883 in cash and cash equivalents
  • The Board declared a quarterly cash dividend of $0.02 per common share, a 33%, increase over the quarterly dividend last year

Dividend

A quarterly dividend of $0.02 per share will be paid on March 3, 2016 to shareholders of record on February 19, 2016. This represents a $0.005, or 33%, increase over the $0.015 dividend the Company previously paid per quarter. The dividends to be paid on March 3, 2016 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 2016 first quarter and results on Thursday, January 28, 2016 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
Condensed Consolidated Interim Balance Sheets
(Amounts in thousands of U.S. Dollars)

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


December 31, 2015

September 30, 2015

Assets:






Current assets:




Cash and cash equivalents

$

27,883

$

26,405


Accounts receivable

3,357

3,598


Unbilled revenue

39

48


Inventories

2,157

1,821


Investment tax credits receivable

142

130


Prepaid and other assets

691

836

Total current assets

34,269

32,838




Investment tax credits

1,355

1,586

Property and equipment

1,972

1,910

Intangible assets

610

701

Total assets

$

38,206

$

37,035




Liabilities and shareholders' equity:






Current liabilities:




Accounts payable and accrued liabilities

$

2,615

$

2,869


Deferred revenue

358

282


Derivative liability

41

-

Total current liabilities

3,014

3,151




Deferred income taxes

538

561




Shareholders' equity:




Share capital

21,902

21,106


Contributed surplus

2,502

2,697


Accumulated other comprehensive income

(41)

-


Retained earnings

10,291

9,520

Total shareholders' equity

34,654

33,323

Total liabilities and shareholders' equity

$

38,206

$

37,035

 

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 December 31

2015

2014




Revenue:




Payment Processing Services

$

3,840

$

3,397


Digital Imaging Products

1,589

2,449


5,429

5,846

Cost of revenue

1,783

2,413

Gross profit

3,646

3,433




Operating expenses:




Sales and marketing

681

750


Research and development

985

1,163


General and administration

530

503


2,196

2,416




Operating income

1,450

1,017




Other items:




Foreign exchange gain (loss)

(7)

16


Interest income

23

15


Other income

-

120


16

151




Income before income taxes

1,466

1,168

Income tax expense




Current

417

45


Deferred

23

-


440

45

Net income

$

1,026

$

1,123




Earnings per share – basic and diluted

$

0.04

$

0.05




Weighted average common shares outstanding during the period

22,287,476

21,661,226

 

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 December 31

2015

2014




Net income

$

1,026

$

1,123




Other comprehensive income:




Effective portion of changes in fair value of cash flow hedges

(41)

(47)

Comprehensive income

$

985

$

1,076

 

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, 2014

$

20,512

$

2,535

$

-

$

5,171

$

28,218


Total comprehensive income for the period:








Net income

-

-

-

1,123

1,123



Effective portion of changes in fair value of cash flow hedges

-

-

(47)

-

(47)








Issuance of share capital

51

(24)

-

-

27


Dividends paid

-

-

-

(190)

(190)


20,563

2,511

(47)

6,104

29,131


Stock-based compensation

-

107

-

-

107

Balance as at December 31, 2014

$

20,563

$

2,618

$

(47)

$

6,104

$

29,238







Balance as at September 30, 2015

$

21,106

$

2,697

$

-

$

9,520

$

33,323


Total comprehensive income for the period:








Net income

-

-

-

1,026

1,026



Effective portion of changes in fair value of cash flow hedges

-

-

(41)

-

(41)








Issuance of share capital

796

(280)

-

-

516


Dividends paid

-

-

-

(255)

(255)


21,902

2,417

(41)

10,291

34,569


Stock–based compensation

-

85

-

-

85

Balance as at December 31, 2015

$

21,902

$

2,502

$

(41)

$

10,291

$

34,654

 

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)

Three months ended December 31

2015

2014


Cash provided by (used in):


Operations:

Net income

$

1,026

$

1,123


Items not involving cash:





Current income tax expense

417

45



Deferred income tax expense

23

-



Depreciation of property and equipment

133

181



Amortization of intangible assets

94

71



Stock-based compensation

85

107



Interest earned

(24)

(15)

Change in non-cash operating working capital

(351)

(665)

Cash provided by operations

1,403

847

Interest received

12

5

Net cash provided by operating activities

1,415

852




Financing:




Issuance of share capital

516

27


Dividends paid

(255)

(190)

Cash used in by financing activities

261

(163)


Investing:




Purchase of property and equipment

(195)

(97)


Additions to intangible assets

(3)

(5)

Cash used in investing activities

(198)

(102)


Increase (decrease) in cash and cash equivalents

1,478

587

Cash and cash equivalents, beginning of period

26,405

22,422

Cash and cash equivalents, end of period

$

27,883

$

23,009

 

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 December 31

2015

2014

Net income

$

1,026

$

1,123

Income tax expense

440

45

Interest income

(24)

(15)

Depreciation and amortization

227

252

Foreign exchange loss (gain)

7

(16)

Stock-based compensation

85

107

Other expense (income)

-

(120)

Adjusted EBITDA

$

1,761

$

1,376

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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