RDM Corporation Reports Fiscal 2016 Third Quarter Financial Results

- Recurring revenue increases 7% -

WATERLOO, ON, July 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 three and nine months ended June 30, 2016. All financial results are reported in thousands of U.S. dollars unless otherwise stated.

"During the quarter, Recurring Payment Processing revenue increased 7% over the prior year," said Randy Fowlie, President and CEO of RDM Corporation. "The increase is despite the delay in the deployment of a significant number of new seats by a large financial institution to our fourth quarter. In addition, we continued to make progress in recovering from the loss of a key distributor in our Digital Imaging business, including establishing a new distribution partner. With the increase in Payment Processing revenue, we continue to generate strong profitability and we look forward to a strong finish to our fiscal 2016 year. Our sales pipeline is expanding and we believe we have a strong market opportunity going forward."

Q3 Fiscal 2016 Highlights (Unless otherwise noted, comparisons are made between Q3 fiscal 2016 and Q3 fiscal 2015) 

  • Total revenue was $5,239 compared to $5,811
  • Recurring Payment Processing revenue was $3,816, up 7% from $3,569
  • Total Payment Processing revenue was $3,989, a 8% increase from $3,698
  • Digital Imaging revenue was $1,250 compared to $2,113
  • Gross margin was 68%, up from 62%
  • Adjusted EBITDA was $1,391 compared to $1,516
  • Net income was $602 compared to $1,351
  • Generated $881 in cash from operations and ended the quarter with $29,490 in cash and cash equivalents
  • End user seats were 47,469 seats, up 8% and 2% over Q3 fiscal 2015 and Q2 fiscal 2016, respectively
  • The Board declared a quarterly cash dividend of $0.02 per common share

 

Year-to-date Fiscal 2016 Highlights (Unless otherwise noted, comparisons are made between year-to-date fiscal 2016 and fiscal 2015)

  • Total revenue was $15,807 compared to $17,415
  • Recurring Payment Processing revenue was $11,402, up 12% from $10,168
  • Total Payment Processing revenue was $11,792, a 11% increase from $10,639
  • Digital Imaging revenue was $4,015 compared to $6,776
  • Gross margin was 68% up from 60%
  • Operating income was $3,229 compared to $3,230
  • Adjusted EBITDA was $4,533, up 5% from $4,323
  • Net income was $2,297 compared to $3,263
  • Generated $4,256 in cash from operations, up 37% compared to $3,107

 

Dividend

A quarterly dividend of $0.02 per share will be paid on September 7, 2016 to shareholders of record on August 19, 2016. The dividends 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 third quarter results on Thursday, July 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 www.rdmcorp.com and http://bit.ly/299upu3 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
Condensed Consolidated Interim Balance Sheets
(Amounts in thousands of U.S. Dollars)

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



June 30, 2016

September 30, 2015




Assets:






Current assets:




Cash and cash equivalents

$

29,490

$

26,405


Accounts receivable

2,815

3,598


Unbilled revenue

61

48


Inventories

2,468

1,821


Investment tax credits receivable

166

130


Prepaid and other assets

785

836

Total current assets

35,785

32,838




Investment tax credits

1,068

1,586

Property and equipment

2,016

1,910

Intangible assets

645

701

Total assets

$

39,514

$

37,035




Liabilities and shareholders' equity:






Current liabilities:




Accounts payable and accrued liabilities

$

3,268

$

2,869


Deferred revenue

347

282

Total current liabilities

3,615

3,151




Deferred income taxes

465

561




Shareholders' equity:




Share capital

21,960

21,106


Contributed surplus

2,594

2,697


Retained earnings

10,880

9,520

Total shareholders' equity

35,434

33,323

Total liabilities and shareholders' equity

$

39,514

$

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
June 30

Nine months ended
June 30


2016

2015

2016

2015






Revenue:






Payment Processing Services

$

3,989

$

3,698

$

11,792

$

10,639


Digital Imaging Products

1,250

2,113

4,015

6,776


5,239

5,811

15,807

17,415

Cost of revenue

1,662

2,223

5,050

6,958

Gross profit

3,577

3,588

10,757

10,457






Operating expenses:






Sales and marketing

734

729

2,093

2,216


Research and development

1,276

1,129

3,527

3,435


General and administration

713

576

1,908

1,576


2,723

2,434

7,528

7,227






Operating income

854

1,154

3,229

3,230






Other items:






Foreign exchange loss

(27)

(7)

(31)

(22)


Interest income

33

18

83

49


Other income

-

451

-

571


6

462

52

598






Income before income taxes

860

1,616

3,281

3,828

Income tax expense






Current

339

265

1,171

565


Deferred

(81)

-

(187)

-


258

265

984

565

Net income

$

602

$

1,351

$

2,297

$

3,263






Earnings per share – basic and  diluted

$

0.03

$

0.06

$

0.10

$

0.15

Weighted average common shares outstanding during the period

22,588,726

22,024,976

22,306,851

21,836,851

 

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


2016

2015

2016

2015






Net income

$

602

$

1,351

$

2,297

$

3,263






Other comprehensive income:






Effective portion of changes in fair value of cash flow hedges

-

85

-

-

Comprehensive income

$

602

$

1,436

$

2,297

$

3,263

 

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

-

-

-

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)


21,106

2,294

-

7,710

31,110


Stock-based compensation

-

315

-

-

315

Balance as at June 30, 2015

$

21,106

$

2,609

$

-

$

7,710

$

31,425







Balance as at September 30, 2015

$

21,106

$

2,697

$

-

$

9,520

$

33,323


Total comprehensive income for the period:








Net income

-

-

-

2,297

2,297



Effective portion of changes in

fair value of cash flow hedges

-

-

-

-

-








Issuance of share capital

854

(308)

-

-

546


Dividends paid

-

-

-

(937)

(937)


21,960

2,389

-

10,880

35,229


Stock–based compensation

-

205

-

-

205

Balance as at June 30, 2016

$

21,960

$

2,594

$

-

$

10,880

$

35,434

 


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

2016

2015




Cash provided by (used in):






Operations:



Net income

$

2,297

$

3,263


Items not involving cash:





Current income tax expense

1,171

565



Deferred income tax expense

(187)

-



Depreciation of property and equipment

436

514



Amortization of intangible assets

294

264



Stock-based compensation

574

315



Interest earned

(83)

(49)

Change in non-cash operating working capital

(347)

(1,805)

Cash provided by operations

4,155

3,067

Interest received

101

40

Net cash provided by operating activities

4,256

3,107

 

Financing:




Issuance of share capital

546

353


Dividends paid

(937)

(724)

Cash used in by financing activities

(391)

(371)




Investing:




Purchase of property and equipment

(542)

(240)


Additions to intangible assets

(238)

(241)

Cash used in investing activities

(780)

(481)




Increase (decrease) in cash and cash equivalents

3,085

2,255

Cash and cash equivalents, beginning of period

26,405

22,422

Cash and cash equivalents, end of period

$

29,490

$

24,677

 

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





           Three months ended

              June 30

           Nine months ended

               June 30


2016

2015

2016

2015

Net income

$

602

$

1,351

$

2,297

$

3,263

Income tax expense

258

265

984

565

Interest income

(33)

(18)

(83)

(49)

Depreciation and amortization

242

259

730

778

Foreign exchange loss

27

7

31

22

Stock-based compensation

295

103

574

315

Other expense (income)

-

(451)

-

(571)

Adjusted EBITDA

$

1,391

$

1,516

$

4,533

$

4,323

 

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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