RuggedCom reports 29 per cent revenue growth for first quarter of fiscal 2008



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

    
    Highlights from the Quarter:
      -  Successfully completed initial public offering
      -  Record revenue of $8.8 million up 29 per cent year over year
      -  Record purchase orders of $9.5 million up 37 per cent year over year
      -  Gross margins up 3.3 percentage points year over year
    

    WOODBRIDGE, ON, Aug. 8 /CNW/ - RuggedCom Inc. (TSX: RCM) today announced
its financial results for the first quarter of fiscal 2008, ended June 30,
2007.
    "The first quarter of fiscal 08 was certainly an exciting one for
RuggedCom, marked by the successful completion of our IPO and several record
achievements," said Marzio Pozzuoli, President and Chief Executive Officer.
"Our increases in revenue, new customers and purchase orders reflect the high
potential of the rugged communications industry and RuggedCom's growing
reputation for providing quality products and excellent service. Going
forward, we believe that the strength of our business model, our track record
of solid financial performance and our commitment to steady, consistent growth
demonstrate that the Company is well-positioned to build significant
shareholder value on a long-term basis."

    First Quarter Results

    Total revenue for the quarter was $8.8 million, up 28.8 per cent from the
comparable quarter of 2006. The revenue growth was primarily due to increased
sales in RuggedCom's electric power, industrial process and military markets,
which set new company records.
    Customer purchase orders totaled $9.5 million for the quarter, a company
record representing an increase of 37.0 per cent over the same quarter last
year.
    Gross margin for the quarter was $4.8 million, an increase of 37 per cent
over the comparable period last year. On a percentage basis, first quarter
gross margin was 54.6 per cent, an increase of 3.3 percentage points over
51.3 per cent for the same period last year. This increase in margin
percentage was due in part to RuggedCom's product mix comprising sales across
the Company's markets, which resulted in lower cost of goods sold relative to
revenue.
    First quarter net income was $178,000, representing the Company's ninth
consecutive quarter of profitability. This compares to net income of $667,000
in the first quarter last year. The decrease was due to several factors. The
strengthening Canadian dollar relative to the US dollar during the current
quarter accounted for a decrease in net income before taxes of approximately
$160,000. Certain one-time general and administrative expenses, including
professional fees and bad debt expense, accounted for a decrease in net income
before taxes of approximately $334,000. The Company also recorded a provision
for income taxes of $259,000. This compares to nil in the same period last
year as the Company was not taxable at that time. The relatively high
effective tax rate for the current quarter of 59.2% was due to certain
permanent differences, including interest expense relating to the Company's
Class A preferred shares. The Class A preferred shares were automatically
converted to common shares on the completion of the Company's initial public
offering and the interest accretion related to these shares ceases to accrue.
Earnings per basic share were $0.03 compared to $0.13 for the same quarter
last year while earnings per diluted share were $0.02 compared to $0.09 for
the same quarter last year.

    Conference Call and Webcast
    ---------------------------
    Management will host a conference call at 10 a.m. (ET) on Thursday,
August 9, 2007. Listeners may attend the conference call by dialing
416-849-9305 or 1-866-838-4337. 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 August 16, 2007. To access the rebroadcast, please
call 416-915-1035 or 1-866-245-6755 and enter passcode 863398 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 periods ended June 30, 2006 and June 30, 2007 can be found
under the Company's profile at www.sedar.com.


    
                               RuggedCom Inc.
                  CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                       1st Quarter ended June 30, 2007



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

                                                        June 30,    March 31,
                                                           2007         2007
                                                     (unaudited)    (audited)
                                                              $            $
                                                              -            -

    Assets
    Current
    Cash and cash equivalents                            38,168        3,829
    Accounts receivable (note 5)                          4,836        4,621
    Prepaid expenses and other                            1,571        1,640
    Inventories                                           3,153        2,608
    Future income taxes                                      24           81
                                                     -----------------------

                                                         47,752       12,779
    Future income taxes                                   1,411           48
    Property and equipment                                1,843        1,800
    Other assets                                            153          181
                                                     -----------------------

                                                         51,159       14,808
                                                     -----------------------
                                                     -----------------------

    Liabilities
    Current
    Accounts payable and accrued liabilities              6,250        3,985
    Warranty                                                518          499
    Income taxes payable                                     91          934
    Current portion of obligations under
     capital lease                                          271          237
                                                     -----------------------

                                                          7,130        5,655
    Warranty                                                464          408
    Obligations under capital lease                         424          434
    Leasehold inducements                                    37           36
    Preferred shares (note 6)                                 -        4,844
                                                     -----------------------

                                                          8,055       11,377
                                                     -----------------------

    Shareholders' Equity
    Capital stock (note 7)                               44,348        3,858
    Contributed surplus (note 8)                            634        1,629
    Deficit(*)                                           (1,878)      (2,056)
                                                     -----------------------

                                                         43,104        3,431
                                                     -----------------------

                                                         51,159       14,808
                                                     -----------------------
                                                     -----------------------

    Contingent liabilities (note 9)
    See accompanying notes to consolidated financial statements.
    (*)Deficit includes comprehensive income and accumulated other
       comprehensive income



                               RuggedCom Inc.
             CONSOLIDATED STATEMENTS OF EARNINGS, COMPREHENSIVE
                             INCOME AND DEFICIT
       (in thousands of Canadian dollars except per share information)
                                 (unaudited)

                                                        3 month      3 month
                                                         period       period
                                                     ended June   ended June
                                                       30, 2007     30, 2006
                                                              $            $
                                                              -            -

    Revenue                                               8,784        6,818
    Cost of goods sold                                    3,985        3,319
                                                     -----------------------

    Gross margin                                          4,799        3,499
                                                     -----------------------

    Operating expenses
    Research and development - net of scientific
     research and experimental development
     investment tax credits of $75 (2006 - $NIL )           768          547
    Sales and marketing                                   1,904        1,354
    General and administrative                            1,353          643
    Amortization                                            216          124
                                                     -----------------------

                                                          4,241        2,668
                                                     -----------------------

    Operating income                                        558          831
    Interest                                                121          164
                                                     -----------------------
    Income before income taxes                              437          667
                                                     -----------------------

    Income taxes
    Current                                                 275            -
    Future                                                  (16)           -
                                                     -----------------------

                                                            259            -
                                                     -----------------------

    Net income and comprehensive income for
     the period                                             178          667
                                                     -----------------------

    Deficit -- Beginning of period                       (2,056)      (5,225)
                                                     -----------------------

    Deficit -- End of period                             (1,878)      (4,558)
                                                     -----------------------
                                                     -----------------------

    Net earnings per share Basic                      $    0.03    $    0.13
    Diluted                                           $    0.02    $    0.09

    Basic weighted average number of common shares
     outstanding                                      5,926,776    5,296,087
    Diluted weighted average number of common shares
     outstanding                                      7,215,243    9,180,369

    See accompanying notes to consolidated financial statements.



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

                                                        3 month      3 month
                                                         period       period
                                                     ended June   ended June
                                                       30, 2007     30, 2006

                                                              $            $
                                                              -            -
    Cash provided by (used in)
    Operating activities
    Net income for the period                               178          667
    Non-cash items
      Amortization of property and equipment                170          101
      Amortization of other assets                           46           23
      Loss on disposal of property and equipment              6            -
      Future income taxes                                   (16)           -
      Accretion and cumulative dividends on
       preferred shares                                     162          158
      Stock based compensation                              109           46
      Warranty                                               75          100
      Leasehold inducements                                   1            3
      Net change in non-cash working
       capital (note 13)                                   (357)        (360)
                                                     -----------------------
                                                            374          738
                                                     -----------------------
    Investing activities
    Additions to property and equipment                    (133)        (193)
    Additions to other assets                               (18)          (7)
                                                     -----------------------

                                                           (151)        (200)
                                                     -----------------------

    Financing activities
    Decrease in long-term debt                                -          (12)
    Repayment of obligations under capital lease            (61)         (22)
    Issuance of common shares                            36,824           50
    Share issuance costs                                 (2,647)           -
                                                     -----------------------
                                                         34,116           16

    Increase in cash and cash equivalents
     during the period                                   34,339          554
    Cash and cash equivalents -- Beginning of period      3,829          784
                                                     -----------------------

    Cash and cash equivalents -- End of period           38,168        1,338
                                                     -----------------------
                                                     -----------------------

    Supplementary information
    Interest paid                                     $      24    $       6
    Income taxes paid                                 $   1,040    $       -
    





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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