RuggedCom reports 44 per cent revenue growth for second quarter of fiscal 2008



    /NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN
    THE U.S./

    (All dollar amounts are in US dollars)

    
    Highlights from the Quarter:
    -   Record revenue of $9.4 million, up 44% year over year
    -   Continued strong growth in the Electric Power sector, up 73% year
        over year
    -   Net income of $1.1 million, up 145% year over year.
    

    WOODBRIDGE, ON, Nov. 7 /CNW/ - RuggedCom Inc. ("RuggedCom") (TSX:RCM), a
leading provider of rugged communications networking solutions designed for
mission-critical applications in harsh environments, today announced its
financial results for the second quarter of fiscal 2008, ended September 30,
2007.
    "The results of our first complete quarter subsequent to the completion
of our initial public offering reflect the Company's continued success in
growing revenues and profits," said Marzio Pozzuoli, President and Chief
Executive Officer.

    Second Quarter Results

    Total revenue for the quarter was $9.4 million, up 44% from the
comparable quarter of a year ago. The revenue growth was primarily due to
increased sales in RuggedCom's electric power market, which comprised 72% of
the Company's total revenue, and which grew 73% over the same quarter last
year.
    Customer purchase orders totaled $9.2 million for the quarter, another
company record, representing an increase of 43% over the same quarter last
year.
    Gross margin for the quarter was $5.1 million, an increase of 45% over
the comparable period last year. On a percentage basis, second quarter gross
margin was 54.9%, a slight increase of 0.3 percentage points over 54.6% for
the same period last year.
    Second quarter net income was $1.1 million, representing the Company's
tenth consecutive quarter of profitability. This represents a 145% increase
over net income of $0.4 million in the second quarter last year. The increase
was partially due to the accrual of $0.3 million of SR&ED tax credits relating
to prior fiscal years. Excluding these tax credits, net income would have
increased 87% over the same quarter of last year. In addition, the Company
recorded $0.4 million of interest income for the quarter compared to
$0.1 million of interest expense in the same quarter last year. The continued
strength of the Canadian dollar relative to the US dollar during the current
quarter offset these gains somewhat and resulted in a foreign exchange loss of
$0.2 million. The Company also recorded a provision for income taxes of
$0.6 million resulting from an effective tax rate of 34.9%. This compares to
$0.5 million of income tax expense in the same period last year. Earnings per
basic share were $0.09 compared to $0.08 for the same quarter last year while
earnings per diluted share were $0.09 compared to $0.06 for the same quarter
last year.

    Conference Call and Webcast
    ---------------------------
    Management will host a conference call at 8:30 a.m. (ET) on
Thursday, November 8, 2007. Listeners may attend the conference call by
dialing 416-644-3432 or 1-800-814-4890. The live audio webcast can be accessed
at RuggedCom's web site at www.RuggedCom.com. The webcast will also be
archived on the site. A taped rebroadcast will be available to listeners
following the call until 12 a.m. (ET) on November 15, 2007. To access the
rebroadcast, please call 416-640-1917 or 1-877-289-8525 and enter passcode
21252286 followed by the number sign.

    About RuggedCom Inc.
    --------------------
    RuggedCom is a leading provider of rugged communications networking
solutions designed for mission-critical applications in harsh environments.
RuggedCom's technology solutions include Ethernet switches, network routers,
wireless devices, serial servers, media converters, software and professional
services. RuggedCom's products are designed for use in harsh environments such
as those found in electrical power substations and "Smart Grids", intelligent
transportation systems, industrial process control and military applications.
For further information, please visit www.RuggedCom.com.

    The unaudited consolidated interim financial statements and management's
discussion and analysis of the results of operations and financial condition
for the three month and six month periods ended September 30, 2006 and 
September 30, 2007 can be found under the Company's profile at www.sedar.com.


    
                               RuggedCom Inc.
                  CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                    2nd Quarter ended September 30, 2007



                               RuggedCom Inc.
                         CONSOLIDATED BALANCE SHEETS
                   (in thousands of United States dollars)

                                                   September           March
                                                    30, 2007        31, 2007
                                                  (unaudited)       (audited)
                                                           $               $

    Assets
    Current
    Cash and cash equivalents (note 5)                 8,385           3,316
    Short term investments                            35,283               -
    Accounts receivable (note 6)                       4,569           4,002
    Prepaid expenses and other                         1,573           1,420
    Inventories                                        2,828           2,259
    Income taxes recoverable                             615               -
    Future income taxes                                  136              70
                                                -----------------------------

                                                      53,389          11,067
    Future income taxes                                1,349              42
    Property and equipment                             1,885           1,559
    Other assets                                         174             157
                                                -----------------------------

                                                      56,797          12,825
                                                -----------------------------
                                                -----------------------------

    Liabilities
    Current
    Accounts payable and accrued liabilities           5,188           3,451
    Current portion of warranty liability                552             432
    Income taxes payable                                   -             809
    Current portion of obligations under
     capital lease                                       281             206
                                                -----------------------------

                                                       6,021           4,898
    Warranty                                             531             354
    Obligations under capital lease                      353             376
    Leasehold inducements                                 38              31
    Preferred shares (note 7)                              -           4,195
                                                -----------------------------

                                                       6,943           9,854
                                                -----------------------------

    Shareholders' Equity
    Capital stock (note 8)                            45,858           3,211
    Accumulated other comprehensive income
     (note 9)                                          3,686             (54)
    Contributed surplus (note 10)                        622           1,344
    Deficit                                             (312)         (1,530)
                                                -----------------------------

                                                      49,854           2,971
                                                -----------------------------

                                                      56,797          12,825
                                                -----------------------------
                                                -----------------------------

    Contingent liabilities (note 11)
    See accompanying notes to consolidated financial statements.



                               RuggedCom Inc.
               CONSOLIDATED STATEMENTS OF EARNINGS AND DEFICIT
    (in thousands of United States dollars except per share information)
                                 (unaudited)

                                3 month     3 month     6 month     6 month
                                 period      period      period      period
                                  ended       ended       ended       ended
                               September   September   September   September
                                30, 2007    30, 2006    30, 2007    30, 2006
                                       $           $           $           $

    Revenue                        9,370       6,489      17,401      12,557
    Cost of goods sold             4,227       2,946       7,870       5,900
                               ----------------------------------------------

    Gross margin                   5,143       3,543       9,531       6,657
                               ----------------------------------------------

    Operating expenses
    Research and development -
     net of scientific
     research and experimental
     development investment tax
     credits of $392 (6 month
     2007 - $460, 2006 - $NIL)       607         524       1,309       1,011
    Sales and marketing            1,849       1,187       3,590       2,392
    General and administrative     1,282         660       2,519       1,232
    Amortization                     187         127         384         237
                               ----------------------------------------------

                                   3,925       2,498       7,802       4,872
                               ----------------------------------------------

    Operating income               1,218       1,045       1,729       1,785
    Interest (income) expense       (400)        149        (289)        295
                               ----------------------------------------------

    Income before income taxes     1,618         896       2,018       1,490
                               ----------------------------------------------

    Income taxes (note 16)
    Current                          487         465         738         465
    Future                            77           -          62           -
                               ----------------------------------------------

                                     564         465         800         465
                               ----------------------------------------------

    Net income for the period      1,054         431       1,218       1,025
                               ----------------------------------------------

    Deficit - Beginning of
     period                       (1,366)     (3,706)     (1,530)     (4,300)
                               ----------------------------------------------

    Deficit - End of period         (312)     (3,275)       (312)     (3,275)
                               ----------------------------------------------
                               ----------------------------------------------


    Net earnings per share
    Basic                      $    0.09   $    0.08   $    0.14   $    0.19
    Diluted                    $    0.09   $    0.06   $    0.13   $    0.14

    Basic weighted average
     number of common shares
     outstanding              11,412,488   5,343,950   8,676,506   5,320,150
    Diluted weighted average
     number of common shares
     outstanding              12,294,460   9,180,021   9,569,035   9,180,194

    See accompanying notes to consolidated financial statements.



                               RuggedCom Inc.
               CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                   (in thousands of United States dollars)
                                 (unaudited)

                                3 month     3 month     6 month     6 month
                                 period      period      period      period
                                  ended       ended       ended       ended
                               September   September   September   September
                                30, 2007    30, 2006    30, 2007    30, 2006
                                       $           $           $           $

    Net income for the period      1,054         431       1,218       1,025
    Foreign currency
     translation gain              3,171           -       3,740           -
                               ----------------------------------------------
    Comprehensive income           4,225         431       4,958       1,025
                               ----------------------------------------------
                               ----------------------------------------------



                               RuggedCom Inc.
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                  (in thousands of United States dollars )
                                 (unaudited)

                                3 month     3 month     6 month     6 month
                                 period      period      period      period
                                  ended       ended       ended       ended
                               September   September   September   September
                                30, 2007    30, 2006    30, 2007    30, 2006
                                       $           $           $           $
    Cash provided by
     (used in)
    Operating activities
    Net income for the period      1,054         431       1,218       1,025
    Non-cash items
      Amortization of property
       and equipment                 178         108         333         198
      Amortization of other
       assets                          9          19          51          39
      Gain on disposal of
       property and equipment         (8)          -          (3)          -
      Future income taxes             77           -          62           -
      Accretion and cumulative
       dividends on preferred
       shares                          -         141         148         282
      Stock based compensation       103          41         203          82
      Warranty                        91          38         160         127
      Leasehold inducements            1           3           2           6
      Net change in non-cash
       working capital
       (note 15)                     (64)        115        (391)       (205)
                               ----------------------------------------------

                                   1,441         896       1,783       1,554
                               ----------------------------------------------

    Investing activities
    Additions to short term
     investments                 (33,359)          -     (33,359)          -
    Proceeds from disposal of
     property and equipment           11           -          11           -
    Additions to property and
     equipment                      (210)       (141)       (332)       (313)
    Additions to other assets        (29)         (9)        (45)        (15)
                               ----------------------------------------------

                                 (33,587)       (150)    (33,725)       (328)
                               ----------------------------------------------

    Financing activities
    Decrease in long-term debt         -          (7)          -         (18)
    Repayment of obligations
     under capital lease             (62)        (26)       (118)        (46)
    Issuance of common shares      5,289          21      39,603          65
    Share issuance costs          (1,382)          -      (3,802)          -
                               ----------------------------------------------

                                   3,845         (12)     35,683           1
                               ----------------------------------------------

    Effect of exchange rates
     on cash                         861          (2)      1,328          33
                               ----------------------------------------------

    Increase in cash and cash
     equivalents during the
     period                      (27,440)        732       5,069       1,260
    Cash and cash equivalents -
     Beginning of period          35,825       1,199       3,316         671
                               ----------------------------------------------

    Cash and cash equivalents -
     End of period                 8,385       1,931       8,385       1,931
                               ----------------------------------------------
                               ----------------------------------------------

    Supplementary information
    Interest paid                $    23      $    5     $    23      $    5
    Income taxes paid            $   996      $    -     $   996      $    -
    






For further information:

For further information: Roy Dalton, Chief Financial Officer, RuggedCom
Inc., Tel: (905) 856-5288, Email: Investor@RuggedCom.com

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RUGGEDCOM INC.

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