Ruggedcom reports record revenues and record booked orders for Q3 fiscal 2010
(All dollar amounts are in US dollars) Highlights from the Quarter: - 35% increase in Purchase Orders year over year, a new company record - 30% increase in Revenue year over year, a new company record - 19% increase in Gross Margin year over year - 70% decrease in Net Income year over year - Added 119 new customers, up from 98 in the year ago period
CONCORD, ON,
"Record growth in both the electric power and industrial sectors contributed to RuggedCom posting record revenues in the third quarter. We also recorded a third consecutive record quarter in purchase orders. However, net income was impacted by several factors, including foreign exchange losses, increased amortization expense as well as increased research and development investment resulting from our recent WiNetworks acquisition." said Marzio Pozzuoli, President and Chief Executive Officer.
Third Quarter Results
Total revenue for the quarter set a new record at
RuggedCom booked record customer purchase orders totaling
Gross margin for the quarter was
Third quarter net income was
- the inclusion of WiNetworks' resultant loss of $1.2 million for the period, which included expenditures of $0.9 million of research and development investment; - a negative foreign exchange impact of $0.9 million which was due to foreign exchange losses of $0.3 million from a strengthening Canadian dollar relative to the US dollar, compared to a foreign exchange gain of $0.6 million in the same period a year ago; - increased amortization expense as a result of the leasehold improvements and other capital expenditures made this fiscal year in combination with the amortization of intangible assets acquired in the WiNetworks purchase; - falling interest rates contributing to the decrease in earnings for the current quarter, as the Company earned only $25,000 net interest income compared to $0.3 million in the same period last year; and - increased operating expenditures in research and development, sales and marketing, and general administration to support the growth of our core business.
WiNetworks contributed approximately
RuggedCom recorded a provision for income taxes of
Third quarter basic earnings per share were
RuggedCom added 119 new customers in the quarter, up from 98 in the year ago period.
Conference Call and Webcast ---------------------------
Management will host a conference call at
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
RuggedCom Inc. CONSOLIDATED INTERIM FINANCIAL STATEMENTS 3rd Quarter ended December 31, 2009 RuggedCom Inc. CONSOLIDATED BALANCE SHEETS (in thousands of United States dollars) December 31, March 31, 2009 2009 (unaudited) (audited) $ $ Assets Current Cash and cash equivalents (note 5) 31,546 45,099 Accounts receivable (note 6) 15,349 9,780 Prepaid expenses and other 1,000 1,025 Inventories (note 4 and note 7) 10,096 4,555 Income taxes recoverable 3,283 - Future income taxes 424 283 ------------------------- 61,698 60,742 Future income taxes - 246 Property and equipment 10,014 2,662 Goodwill 3,456 - Other assets (note 3) 11,687 580 ------------------------- 86,855 64,230 ------------------------- ------------------------- Liabilities Current Accounts payable and accrued liabilities 10,777 5,793 Current portion of warranty 672 482 Income taxes payable 140 2,268 Current portion of deferred income 108 50 Current portion of lease costs 25 - Current portion of obligations under capital lease 108 126 ------------------------- 11,830 8,719 ------------------------- Warranty 438 347 Future income taxes 2,031 - Deferred income 32 21 Obligations under capital lease 117 48 Lease costs payable 249 6 ------------------------- 2,867 422 ------------------------- 14,697 9,141 ------------------------- ------------------------- Shareholders' Equity Capital stock (note 8) 48,836 46,820 Contributed surplus (note 9) 2,227 1,559 Accumulated other comprehensive income (loss) (note 10) 2,350 (8,952) Retained earnings 18,745 15,662 ------------------------- 21,095 6,710 ------------------------- 72,158 55,089 ------------------------- 86,855 64,230 ------------------------- ------------------------- Contingent liabilities (note 19) 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) (unaudited) 3 month 3 month 9 month 9 month period ended period ended period ended period ended December 31, December 31, December 31, December 31, 2009 2008 2009 2008 $ $ $ $ - - - - Revenue 20,600 15,821 53,357 42,957 Cost of goods sold 8,248 5,420 22,035 15,897 ------------------------------------------------------- Gross margin 12,352 10,401 31,322 27,060 ------------------------------------------------------- Operating expenses Research and development 2,536 1,191 6,341 3,553 Sales and marketing 3,942 2,666 10,405 7,743 General and administrative 2,602 1,346 6,363 4,043 Investment tax credits (344) (139) (730) (638) Loss (gain) on foreign exchange 335 (595) 1,864 (787) Amortization 1,002 271 1,903 859 ------------------------------------------------------- 10,073 4,740 26,146 14,773 ------------------------------------------------------- Operating income 2,279 5,661 5,176 12,287 Net interest income 25 303 126 1,131 ------------------------------------------------------- Income before income taxes 2,304 5,964 5,302 13,418 ------------------------------------------------------- Income taxes (note 15) Current 1,001 1,829 1,998 4,357 Future 110 153 221 151 ------------------------------------------------------- 1,111 1,982 2,219 4,508 ------------------------------------------------------- Net income for the period 1,193 3,982 3,083 8,910 Retained earnings - Beginning of period 17,552 8,262 15,662 3,334 ------------------------------------------------------- Retained earnings - End of period 18,745 12,244 18,745 12,244 ------------------------------------------------------- ------------------------------------------------------- Net earnings per share (note 11) Basic $ 0.10 $ 0.34 $ 0.26 $ 0.76 Diluted $ 0.10 $ 0.33 $ 0.25 $ 0.72 Basic weighted average number of common shares outstanding 12,115,981 11,798,435 12,054,376 11,760,669 Diluted weighted average number of common shares outstanding 12,463,263 12,251,346 12,571,357 12,296,445 See accompanying notes to consolidated interim financial statements. RuggedCom Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands of United States dollars ) (unaudited) 3 month 3 month 9 month 9 month period ended period ended period ended period ended December 31, December 31, December 31, December 31, 2009 2008 2009 2008 $ $ $ $ Net income for the period 1,193 3,982 3,083 8,910 Foreign currency translation gain (loss) (note 10) 1,309 (7,067) 11,302 (9,101) ------------------------------------------------------- Comprehensive income 2,502 (3,085) 14,385 (191) ------------------------------------------------------- ------------------------------------------------------- See accompanying notes to consolidated interim financial statements. RuggedCom Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands of United States dollars ) (unaudited) 3 month 3 month 9 month 9 month period ended period ended period ended period ended December 31, December 31, December 31, December 31, 2009 2008 2009 2008 $ $ $ $ Cash provided by (used in) Operating activities Net income for the period 1,193 3,982 3,083 8,910 Non-cash items Amortization of property and equipment 459 253 1,024 808 Amortization of other assets 542 18 877 51 Future income taxes 110 153 221 151 Stock based compensation 276 139 848 475 Warranty (39) 104 (9) 295 Lease costs 88 (7) 252 (23) Net change in non-cash working capital (note 14a) (5,526) (29) (9,525) 87 ------------------------------------------------------- (2,897) 4,613 (3,229) 10,754 ------------------------------------------------------- Investing activities Additions to short term investments - - - 34,787 Acquisition of subsidiary (note 4) (130) - (8,100) - Additions to property and equipment (4,319) (619) (7,199) (1,632) Additions to other assets (256) (63) (1,251) (160) ------------------------------------------------------- (4,705) (682) (16,550) 32,995 ------------------------------------------------------- Financing activities Repayment of obligations under capital lease (66) (56) (158) (196) Receipts from capital lease 189 189 Repayment of loan (note 4) - - (4,875) - Issuance of common shares 105 3 1,842 176 ------------------------------------------------------- 228 (53) (3,002) (20) ------------------------------------------------------- Effect of exchange rates on cash 1,649 (5,785) 9,228 (7,998) ------------------------------------------------------- Increase (decrease) in cash and cash equivalents during the period (5,725) (1,907) (13,553) 35,731 Cash and cash equivalents - Beginning of period 37,271 45,675 45,099 8,037 ------------------------------------------------------- Cash and cash equivalents - End of period (note 14b) 31,546 43,768 31,546 43,768 ------------------------------------------------------- ------------------------------------------------------- Supplemental disclosures Interest paid $ 7 $ 9 $ 30 $ 38 Income taxes paid $ 717 $ 443 $ 6,626 $ 1,882
For further information: Roy Dalton, Chief Financial Officer, RuggedCom Inc., Tel: (905) 856-5288, Email: [email protected]
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