RDM Corporation Reports Fiscal 2016 Fourth Quarter and Year-End Financial Results

–  Recurring revenue increases 10%, driving year-over-year growth in Adjusted EBITDA and cash from operations  –

WATERLOO, ON, Nov. 17, 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 fourth quarter and fiscal year ended September 30, 2016. All financial results are reported in thousands of U.S. dollars unless otherwise stated.

"This year, we continued the momentum in our recurring revenue with an increase of 10%," said Randy Fowlie, President and CEO of RDM. "Recurring revenue now represents 71% of our total revenue. In addition, we continued the improvements in our Digital Imaging business, with an increase of 20% over last quarter. This drove increases in both Adjusted EBITDA and cash from operations. We continue to expand our presence in the market and have a robust pipeline of new Payment Processing opportunities throughout calendar 2017."

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

  • Recurring Payment Processing revenue was $15,189, up 10% from $13,759
  • Total Payment Processing revenue was $15,774, an increase of 10% from $14,295
  • Digital Imaging revenue was $5,547 compared with $9,235
  • Total revenue was $21,321, a decrease of 9% compared with $23,530
  • Gross margin was 67%, up from 61%
  • Operating income was $4,608 compared with $4,560
  • Adjusted EBITDA was $6,318, up 5% from $6,002
  • Net income was $3,870, compared with $5,326
  • Generated $6,326 in cash from operations compared with $5,271, and ended the year with $31,047 in cash and cash equivalents
  • The Company added 4,085 end user seats during the year and exited fiscal 2016 with a total of 48,706 seats, an increase of 9%

Q4 Fiscal Highlights (Unless otherwise noted, comparisons are made between Q4 fiscal 2016 and Q4 2015)

  • Recurring Payment Processing revenue was $3,787, up 5% from $3,591
  • Total Payment Processing revenue was $3,982, an increase of 9% from $3,656
  • Digital Imaging revenue was $1,532 compared with $2,459
  • Total revenue was $5,514 compared with $6,115
  • Gross margin was 66%, up from 62%
  • Operating income was $1,379 compared with $1,330
  • Adjusted EBITDA was $1,785, up 2% from $1,679
  • Net income was $1,573 compared with $2,063
  • Generated $2,003 in cash from operations compared with $2,164
  • Total end user seats of 48,706 seats were up 3% over Q3 fiscal 2016
  • The Board declared a quarterly cash dividend of $0.02 per common share

Dividend

A quarterly dividend of $0.02 per share will be paid on December 16, 2016 to shareholders of record on December 2, 2016. The dividends to be paid on December 16, 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 fourth quarter and year-end results on Thursday, November 17, 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 at www.rdmcorp.com and http://bit.ly/2f4WUvj. It will also be 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 40 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

2016

2015

Assets:






Current assets:




Cash and cash equivalents

$

31,047

$

26,405


Accounts receivable

2,698

3,598


Inventories

2,370

1,821


Investment tax credits receivable

35

130


Prepaid and other assets

600

884

Total current assets

36,750

32,838




Investment tax credits

1,720

1,586

Property and equipment

1,908

1,910

Intangible assets

664

701

Total assets

$

41,042

$

37,035




Liabilities and shareholders' equity:






Current liabilities:




Accounts payable and accrued liabilities

$

3,487

$

2,869


Deferred revenue

332

282

Total current liabilities

3,819

3,151




Deferred income taxes

483

561




Shareholders' equity:




Share capital

21,998

21,106


Contributed surplus

2,636

2,697


Retained earnings

12,106

9,520

Total shareholders' equity

36,740

33,323

Total liabilities and shareholders' equity

$

41,042

$

37,035

 

RDM CORPORATION
Consolidated Statements of Income and Comprehensive 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


2016

2015

2016

2015






Revenue:






Payment Processing Services

$

3,982

$

3,656

$

15,774

$

14,295


Digital Imaging Products

1,532

2,459

5,547

9,235


5,514

6,115

21,321

23,530

Cost of revenue

1,897

2,326

6,947

9,284

Gross profit

3,617

3,789

14,374

14,246






Operating expenses:






Sales and marketing

735

658

2,828

2,874


Research and development

865

1,216

4,392

4,651


General and administration

638

585

2,546

2,161


2,238

2,459

9,766

9,686






Operating income

1,379

1,330

4,608

4,560






Other items:






Foreign exchange gain (loss)

3

56

(28)

34


Interest income

42

21

126

70


Other income

557

1,590

557

2,161


602

1,667

655

2,265






Income before income taxes

1,981

2,997

5,263

6,825

Income tax expense






Current

300

373

1,471

938


Deferred

109

561

(78)

561


409

934

1,393

1,499

Net income and comprehensive income

$

1,573

$

2,063

$

3,870

$

5,326

Earnings per share – basic and diluted

$

0.07

$

0.09

$

0.17

$

0.24

Weighted average common shares outstanding during the year

22,596,226

22,024,976

22,582,789

21,937,164

 

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, 2014

$

20,512

$

2,535

$

-

$

5,171

$

28,218


Total comprehensive income for the period:








Net income

-

-

-

5,326

5,326








Issuance of share capital

594

(241)

-

-

353


Dividends paid

-

-

-

(977)

(977)


21,106

2,294

-

9,520

32,920


Stock-based compensation

-

403

-

-

403

Balance as at September 30, 2015

$

21,106

$

2,697

$

-

$

9,520

$

33,323







Balance as at September 30, 2015

$

21,106

$

2,697

$

-

$

9,520

$

33,323


Total comprehensive income for the period:








Net income

-

-

-

3,870

3,870








Issuance of share capital

892

(319)

-

-

573


Dividends paid

-

-

-

(1,284)

(1,284)


21,998

2,378

-

12,106

36,482


Stock–based compensation

-

258

-

-

258

Balance as at September 30, 2016

$

21,998

$

2,636

$

-

$

12,106

$

36,740

 

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

2016

2015




Cash provided by (used in):






Operations:



Net income

$

3,870

$

5,326


Items not involving cash:





Income tax expense

1,393

1,499



Depreciation of property and equipment

582

681



Amortization of intangible assets

430

358



Loss on disposal of property and equipment

-

289



Stock-based compensation

698

403



Interest earned

(126)

(70)

Change in non-cash operating working capital

(632)

(3,278)

Cash provided by operations

6,215

5,208

Interest received

111

63

Net cash provided by operating activities

6,326

5,271

 

Financing:




Issuance of share capital

573

353


Dividends paid

(1,284)

(977)

Cash used in by financing activities

(711)

(624)




Investing:




Purchase of property and equipment

(580)

(376)


Additions to intangible assets

(393)

(288)

Cash used in investing activities

(973)

(664)




Increase in cash and cash equivalents

4,642

3,983

Cash and cash equivalents, beginning of year

26,405

22,422

Cash and cash equivalents, end of year

$

31,047

$

26,405

 

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

Years ended


September 30

 September 30


2016

2015

2016

2015

Net income

$

1,573

$

2,063

$

3,870

$

5,326

Income tax expense

409

934

1,393

1,499

Interest income

(43)

(21)

(126)

(70)

Depreciation and amortization

282

261

1,012

1,039

Foreign exchange loss

(3)

(56)

28

(34)

Stock-based compensation

124

88

698

403

Other income

(557)

(1,590)

(557)

(2,161)

Adjusted EBITDA

$

1,785

$

1,679

$

6,318

$

6,002






Other (income) expense is comprised of:











Three months ended

Years ended


September 30

 September 30


2016

2015

2016

2015

Recognition of investment tax credits

$

(557)

$

(1,879)

$

(557)

$

(2,064)

Change in estimated royalties

-

-

-

(266)

Change in settlement claim

-

-

-

(120)

Loss on disposal

-

289

-

289

Other income

$

(557)

$

(1,590)

$

(557)

$

(2,161)

 

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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