RDM Corporation Reports Fiscal 2017 First Quarter Financial Results

Payment Processing Revenue increases to 76% of Total Revenue
Dividend increased 25%

WATERLOO, ON, Jan. 26, 2017 /CNW/ - RDM Corporation ("RDM" or the "Company") (TSX: RC), a leading provider of specialized software and hardware products for electronic payment processing, today reported its financial results for the first quarter of the year ending September 30, 2017. All financial results are reported in thousands of U.S. dollars unless otherwise stated.

"The payment processing portion of our business continues to build with an increase this quarter to 76% of total revenue," said Randy Fowlie, President and CEO of RDM Corporation. "The strength of our partnerships continues to drive organic growth with end user seats up 11% over the prior year. In addition, we won a couple non-bank opportunities during the quarter. Cash generation continues to be strong and the Board of Directors declared a quarterly dividend of $0.025, which is a 25% increase over the current dividend."

Q1 Fiscal 2017 Highlights (Unless otherwise noted, comparisons are made between Q1 fiscal 2017 and Q1 fiscal 2016)

  • Total revenue was $5,346 compared to $5,429
  • Recurring Payment Processing revenue was $3,884, up 4% from $3,740
  • Total Payment Processing revenue was $4,037, an increase of 5% from $3,840
  • Digital Imaging revenue was $1,309 in Q1 2017 compared to $1,589
  • Gross margin increased to 69% compared to 67%
  • Adjusted EBITDA was $1,771 compared to $1,761, an increase of 1%.
  • The Company added 1,578 end user seats and ended the quarter with 50,284 end user seats, an increase of 11%
  • The Company generated $786 in cash from operations and ended the quarter with $31,252 in cash and cash equivalents
  • The Board of Directors declared a quarterly cash dividend of CDN $0.025 per common share, a 25% increase over the quarterly dividend last year

Dividend

A quarterly dividend of CDN $0.025 per share will be paid on March 15, 2017 to shareholders of record on February 28, 2017. This represents a $0.005, or 25%, increase over the $0.02 dividend the Company previously paid per quarter. The dividends to be paid on March 15, 2017 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 2017 first quarter and results on Thursday, January 26, 2017 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 30 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, 2016

September 30, 2016

Assets:






Current assets:




Cash and cash equivalents

$

31,252

$

31,047


Accounts receivable

3,046

2,698


Inventories

2,449

2,370


Investment tax credits receivable

142

35


Prepaid and other assets

573

600

Total current assets

37,462

36,750




Investment tax credits

1,534

1,720

Property and equipment

1,822

1,908

Intangible assets

729

664

Total assets

$

41,547

$

41,042




Liabilities and shareholders' equity:






Current liabilities:




Accounts payable and accrued liabilities

$

3,247

$

2,841


Income taxes payable

271

646


Deferred revenue

324

332


Derivative liability

7

-

Total current liabilities

3,849

3,819




Deferred income taxes

367

483




Shareholders' equity:




Share capital

21,998

21,998


Contributed surplus

2,677

2,636


Accumulated other comprehensive income

(7)

-


Retained earnings

12,663

12,106

Total shareholders' equity

37,331

36,740

Total liabilities and shareholders' equity

$

41,547

$

41,042

 

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

2016

2015




Revenue:




Payment Processing Services                                 

$

4,037

$

3,840


Digital Imaging Products

1,309

1,589


5,346

5,429

Cost of revenue

1,671

1,767

Gross profit

3,675

3,662




Operating expenses:




Sales and marketing

751

671


Research and development

943

960


General and administration

656

581


2,350

2,212




Operating income

1,325

1,450




Other items:




Foreign exchange gain (loss)

15

(7)


Interest income

59

23


Other expense

(164)

-


(90)

16




Income before income taxes

1,235

1,466

Income tax expense




Current

455

417


Deferred

(116)

23


339

440

Net income

$

896

$

1,026




Earnings per share – basic and diluted

$

0.04

$

0.04




Weighted average common shares




outstanding during the period

22,603,726

22,287,476

 

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 December 31

2016

2015




Net income

$

896

$

1,026




Other comprehensive income:




Effective portion of changes in fair value of





cash flow hedges                                                          

(7)

(41)

Comprehensive income

$

889

$

985

 

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, 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







Balance as at September 30, 2016

$

21,998

$

2,636

$

-

$

12,106

$

36,740


Total comprehensive income







for the period:








Net income

-

-

-

896

896



Effective portion of changes in








fair value of cash flow hedges

-

-

(7)

-

(7)








Issuance of share capital

-

-

-

-

-


Dividends paid

-

-

-

(339)

(339)


21,998

2,636

(7)

12,663

37,290


Stock–based compensation

-

41

-

-

41

Balance as at December 31, 2016

$

21,998

$

2,677

$

(7)

$

12,663

$

37,331

 

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

2016

2015




Cash provided by (used in):






Operations:



Net income

$

896

$

1,026


Items not involving cash:





Income tax expense    

339

440



Depreciation of property and equipment                

142

133



Amortization of intangible assets

121

94



Stock-based compensation

41

85



Interest earned

(59)

(24)

Income tax paid


(526)


-

Change in non-cash operating working capital


(194)


(351)

Cash provided by operations


760


1,403

Interest received


26


12

Net cash provided by operating activities


786


1,415

 

Financing:




Dividends paid

(339)

(255)


Issuance of share capital

-

516

Cash (used in) provided by financing activities


(339)


261




Investing:



Purchase of property and equipment

(56)

(195)


Additions to intangible assets

(186)

(3)

Cash used in investing activities

(242)


(198)





Increase in cash and cash equivalents

205


1,478

Cash and cash equivalents, beginning of period

31,047


26,405

Cash and cash equivalents, end of period

$

31,252

$

27,883

 

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

2016

2015

Net income

$

896

$

1,026

Income tax expense

339

440

Interest income

(59)

(24)

Depreciation and amortization

263

227

Foreign exchange gain

(15)

7

Stock-based compensation

183

85

Other expense (income)

164

-

Adjusted EBITDA

$

1,771

$

1,761

 

SOURCE RDM Corporation

To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/January2017/26/c2261.html

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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