RUGGEDCOM REPORTS RECORD REVENUE AND PURCHASE ORDERS FOR Q3 FISCAL 2011

(All dollar amounts are in US dollars)

Highlights from the Quarter:

  • 24% increase in Revenue year over year, to $25.6 million, a second consecutive record quarter
  • 20% increase in Purchase Orders year over year, to $24.8 million, a third consecutive record quarter
  • 22% increase in Gross Margin year over year
  • 73% increase in Net Income year over year
  • Added 121 new customers

CONCORD, ON, Feb. 9 /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 third quarter of fiscal 2011, ended December 31, 2010.

"We're delighted to again report record orders and revenues for the quarter." said Marzio Pozzuoli, President and Chief Executive Officer. "The growth is being driven primarily by continued record growth in our electric power and transportation markets. We're also seeing strong growth in the APAC and EMEA regions. Gross margins remain strong and a reduction in operating expenses as a percentage of revenue helped contribute to a solid increase to our bottom line."

Third Quarter Results

Total revenue for the quarter was $25.6 million, representing an increase of 24% from the comparable quarter a year ago. This record revenue was primarily driven by the electric power and transportation markets, which grew 32% and 76% respectively, over the same quarter last year.

The Company booked record customer purchase orders totaling $24.8 million for the quarter, representing an increase of 20% over the same quarter last year.

Gross margin for the quarter was $15.1 million, an increase of 22% over the comparable period last year. On a percentage of revenue basis, third quarter gross margin was 58.9%, a decrease of 1.1 percentage points over a gross margin of 60.0% for the same period last year. The third quarter gross margin percentage exceeded the Company's 5-year historical average of 58.0%.

Third quarter net income was $2.1 million, a 73% increase over the comparable period a year ago. Operating expenses declined to 45.5% of revenues compared with 48.9% for the same period a year ago, highlighted by a decrease in general and administrative expense to $2.5 million from $2.6 million in the same period a year ago. The quarter's operating expenses included foreign exchange losses of approximately $0.7 million compared with approximately $0.3 million in the same period a year ago. The Company also recorded a provision for income taxes of $1.4 million for an effective tax rate of 40.8%. This compares to $1.1 million income tax expense in the same period last year with an effective tax rate of 48.2%.

Third quarter basic earnings per share were $0.17 compared to $0.10 for the same quarter last year while fully diluted earnings per share were $0.16 compared to $0.10 for the same quarter last year.

The Company added 121 new customers in the quarter.

Conference Call and Webcast
Management will host a conference call at 8:30 a.m. (ET) on Thursday, February 10, 2011. Listeners may attend the conference call by dialing 647-427-7450 or 1-888-231- 8191. 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 11:59 PM (ET) on February 17, 2011. To access the rebroadcast, please call 416-849-0833 or 1-800-642- 1687 and enter passcode 35322835#.

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 periods ended December 31, 2010 and December 31, 2009 can be found under the Company's profile at www.sedar.com. They can also be found in the Investor Relations section of the Company's website at www.RuggedCom.com.


RuggedCom Inc.
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
3rd Quarter ended December 31, 2010

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

  December 31, March 31,
  2010 2010
  (unaudited) (audited)
  $ $
Assets    
Current    
Cash and cash equivalents (note 5) 36,813 33,140
Accounts receivable (note 6) 15,414 13,494
Prepaid expenses and other 2,141 1,825
Inventories (note 7) 14,736 10,497
Income taxes recoverable - 1,036
Future income taxes 635 637
  69,739 60,629
Future income taxes - 431
Severance pay fund 544 520
Property and equipment 11,015 11,372
Goodwill (note 4) 2,906 1,928
Intangible assets (note 8) 11,491 11,373
  95,695 86,253
Liabilities    
Current    
Accounts payable and accrued liabilities 7,952 7,618
Current portion of warranty liability 462 604
Income taxes payable 1,640 280
Current portion of deferred income 26 99
Current portion of lease costs 81 26
Current portion of obligations under capital leases 88 105
  10,249 8,732
Future income taxes 92 -
Warranty liability 422 413
Deferred income 81 32
Severance payable 584 558
Obligations under capital leases 35 95
Lease costs payable 293 265
  11,756 10,095
Shareholders' Equity    
Capital stock (note 9) 49,240 48,886
Contributed surplus (note 11) 3,533 2,538
Accumulated other comprehensive income (note 10) 6,689 4,887
Retained earnings 24,477 19,847
  31,166 24,734
  83,939 76,158
  95,695 86,253

See accompanying notes to consolidated interim financial statements.

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

    3 month   3 month   9 month period   9 month period
    period ended   period ended   ended   ended
    December 31,   December 31,   December 31,   December 31,
    2010   2009   2010   2009
                 
    $   $   $   $
Revenue   25,595   20,600   67,277   53,357
Cost of goods sold   10,525   8,248   27,059   22,035
                 
Gross margin   15,070   12,352   40,218   31,322
Operating expenses                
Research and development   3,210   2,536   8,993   6,341
Sales and marketing   4,457   3,942   12,391   10,405
General and administrative   2,531   2,602   7,357   6,363
Investment tax credits   (569)   (344)   (1,150)   (730)
Loss on foreign exchange   669   335   677   1,864
Amortization   1,357   1,002   3,910   1,903
    11,655   10,073   32,178   26,146
Operating income   3,415   2,279   8,040   5,176
Net interest income   64   25   173   126
Income before income taxes   3,479   2,304   8,213   5,302
Provision for income taxes (note 12)                
Current   1,396   1,001   3,057   1,998
Future   22   110   526   221
    1,418   1,111   3,583   2,219
Net income for the period   2,061   1,193   4,630   3,083
Retained earnings — Beginning of period   22,416   17,552   19,847   15,662
Retained earnings — End of period   24,477   18,745   24,477   18,745
Net earnings per common share (note 14)                
Basic $ 0.17 $ 0.10 $ 0.38 $ 0.26
Diluted $ 0.16 $ 0.10 $ 0.37 $ 0.25
Basic weighted average number of common shares   12,167,323   12,115,981   12,157,371   12,054,376
Diluted weighted average number of common shares   12,510,324   12,463,263   12,461,507   12,571,357

See accompanying notes to consolidated interim financial statements.

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

  3 month 3 month 9 month period 9 month period
  period ended period ended ended ended
  December 31, December 31, December 31, December 31,
  2010 2009 2010 2009
         
  $ $ $ $
         
Net income for the period 2,061 1,193 4,630 3,083
         
Unrealized foreign currency translation gain (note 10) 2,765 1,309 1,802 11,302
         
Comprehensive income for the period 4,826 2,502 6,432 14,385

See accompanying notes to consolidated interim financial statements.

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

  3 month 3 month 9 month period 9 month period
  period ended period ended ended ended
  December 31, December 31, December 31, December 31,
  2010 2009 2010 2009
         
  $ $ $ $
Cash provided by (used in)        
Operating activities        
Net income for the period 2,061 1,193 4,630 3,083
Non-cash items        
  Amortization of property and equipment 836 459 2,194 1,024
  Amortization of other assets 521 542 1,717 877
  Future income taxes 22 110 526 221
  Stock-based compensation 321 276 1,120 848
  Warranty liability 13 (39) (149) (9)
  Lease costs 41 88 75 252
Net change in non-cash working capital (note 13 (a)) (897) (5,526) (3,299) (9,525)
  2,918 (2,897) 6,814 (3,229)
Investing activities        
Acquisition of subsidiary (note 4(b)) - (130) - (8,100)
Acquisition business assets (note 4(a)) (2,119) - (2,119) -
Additions to property and equipment (323) (4,319) (1,451) (7,199)
Additions to other assets (172) (256) (535) (1,251)
  (2,614) (4,705) (4,105) (16,550)
Financing activities        
Repayment of obligations under capital leases (26) (66) (78) (158)
Receipts from capital lease - 189 - 189
Repayment of loan (note 4(b)) - - - (4,875)
Issuance of common shares 152 105 228 1,842
  126 228 150 (3,002)
Effect of exchange rates on cash 1,226 1,649 814 9,228
Increase (decrease) in cash and cash equivalents during the period 1,656 (5,725) 3,673 (13,553)
Cash and cash equivalents — Beginning of period 35,157 37,271 33,140 45,099
Cash and cash equivalents — End of period (note 13(b)) 36,813 31,546 36,813 31,546

See accompanying notes to consolidated interim financial statements.

SOURCE RuggedCom Inc.

For further information:

Roy Dalton
Chief Financial Officer
RuggedCom Inc.
Tel: 905-856-5288
Email: Investor@RuggedCom.com

Organization Profile

RuggedCom Inc.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890