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
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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
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Gross margin 12,352 10,401 31,322 27,060
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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)
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Comprehensive
income 2,502 (3,085) 14,385 (191)
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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
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228 (53) (3,002) (20)
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Effect of exchange
rates on cash 1,649 (5,785) 9,228 (7,998)
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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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