Growth in Payment Processing Drives Higher Margins Toronto Stock Exchange Symbol: RC WATERLOO, ON, Jan. 31, 2013 /CNW/ - RDM Corporation (TSX: RC), a leading provider of specialized software and hardware products for electronic payment processing, today reported its financial results for the three-month period ended December 31, 2012. All figures are reported in U.S. dollars unless otherwise stated. Q1 2013 Highlights -- Total revenue was $4.8 million in the first quarter of fiscal 2013, an increase of 5.8% from $4.5 million in Q1 2012. -- Payment Processing Services revenue was $3.1 million, up 14% from $2.7 million in Q1 2012. -- Revenue for Digital Imaging Products came in at $1.7 million, 7% below Q1 of 2012. -- Gross profit was $2.7 million, or 58% of revenues in Q1 2013, compared to $2.2 million or 49% of revenues in Q1 2012. -- The Company added 1,147 new end user seats to bring its ITMS network to 29,658 seats, an increase of 19% from one year earlier. -- Adjusted EBITDA was $559,000 in the first quarter of 2013, up from $158,000 for the same period last year. -- Net income for the quarter came in at $192,000, or $0.01 per share, compared to $144,000, or $0.01 per share last year. -- The Company generated $642,000 in cash from operations during the quarter and ended the period with a cash balance of $19.4 million. -- The Company added two new financial services customers during the quarter. Randy Fowlie, President and CEO of RDM, stated: "We are pleased with the solid growth in Payment Processing Services revenue. However, the business climate in the U.S. continues to be difficult and revenues from Digital Imaging products were slightly behind expectations. That said, overall revenues were up compared to last year and we saw a significant improvement in the gross margin for both product lines, coming in at 67% and 40% respectively, as compared to 51% and 37% respectively for the same period last year." "With well over a thousand end user seats added in the quarter to our ITMS network, the product mix continues to shift towards our higher margin business and is a strong driver of profitability. In addition, we added two new financial institutions this past quarter. Later in the year, we will launch an upgrade of our hardware, which should further strengthen RDM's position in the POS scanner field." Conference Call RDM will be hosting a conference call to discuss the Company's third quarter results on 31 January at 9:00 a.m. EDT. Dial-in numbers are 647-427-7450 or 1-888-231-8191.The call will be webcast live and archived at www.rdmcorp.com. Detailed financial results and Management's Discussion and Analysis will be filed on www.sedar.com. Non-IFRS Measures Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization adjusted for foreign exchange gains and losses, stock-based compensation and one time charges) is provided to assist management and investors in determining the Company's approximate operating cash flows before interest, income taxes, and depreciation and amortization. Adjusted EBITDA does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. Management believes that RDM shareholders and potential investors in RDM use non-IFRS financial measures such as adjusted EBITDA in making investment decisions about the Company and measuring the operational results. About RDM Corporation RDM Corporation is headquartered in Waterloo, Ontario and trades on the Toronto Stock Exchange under the symbol RC. RDM is a leading provider of specialized software and hardware products for electronic payment processing. RDM has pioneered electronic check conversion systems and web based image and transaction management services for banks, retailers, payment processors and government agencies as well as print quality control and image quality systems for a variety of global customers. For more information, visit RDM's website at www.RDMCorp.com. This news release contains forward-looking statements. Forward-looking statements are based on estimates and assumptions made by RDM in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that RDM believes are appropriate in the circumstances. Many factors could cause RDM's actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements. Risk factors relating to RDM are discussed in the Risks and Uncertainties section of RDM's Annual Information Form and year-end Management's Discussion and Analysis. These factors should be considered carefully, and readers should not place undue reliance on RDM's forward-looking statements. RDM has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. RDM CORPORATION Condensed Consolidated Interim Balance Sheets (Amounts in thousands of U.S. Dollars) (Unaudited) December 31, 2012 September 30, 2012 Assets: Current assets: Cash and cash $ 19,366 $ 18,897 equivalents Accounts receivable 2,812 3,094 Inventories 2,930 2,469 Investment tax 150 336 credit receivable Prepaid and other 636 569 assets Derivative assets 47 63 Total current assets 25,941 25,428 Investment tax credits 409 453 Property and equipment 2,030 1,951 Intangible assets 742 860 Total assets $ 29,122 $ 28,692 Liabilities and shareholders' equity: Current liabilities: Accounts payable $ 2,816 2,577 and accrued $ liabilities Deferred revenue 282 275 Total current liabilities 3,098 2,852 Shareholders' equity: Share capital 19,979 19,960 Contributed surplus 2,365 2,323 Accumulated other 47 116 comprehensive income Retained earnings 3,633 3,441 Total shareholders' equity 26,024 25,840 Contingencies Total liabilities and $ 29,122 $ 28,692 shareholders' equity RDM CORPORATION Condensed Consolidated Interim Statements of Income (Amounts in thousands of U.S. Dollars, except per share data) (Unaudited) Three months ended December 31 2012 2011 Revenue: Payment Processing $ 3,108 $ 2,723 Services Digital Imaging 1,659 1,783 Products 4,767 4,506 Cost of revenue 2,018 2,293 Gross profit 2,749 2,213 Operating expenses: Sales and marketing 841 898 Research and 1,095 964 development General and 555 526 administration 2,491 2,388 Results from operating activities 258 (175) Other items: Foreign exchange (40) 355 gain (loss) Interest 12 28 (28) 383 Income before income taxes 230 208 Current income tax expense 38 64 Income for the period $ 192 $ 144 Income per share - basic and $ 0.01 $ 0.01 diluted RDM CORPORATION Condensed Consolidated Interim Statements of Comprehensive Income (Amounts in thousands of U.S. Dollars) (Unaudited) Three months ended December 31 2012 2011 Income for the period $ 192 $ 144 Other comprehensive income: Effective portion of changes in (69) 87 fair value of cash flow hedges Comprehensive income $ 123 $ 231 RDM CORPORATION Condensed Consolidated Interim Statements of Changes in Shareholder's Equity (Amounts in thousands of U.S. Dollars) (Unaudited) Accumulated other Share Contributed comprehensive Retained capital surplus income earnings Total Balance as at $ 19,960 $ 2,115 $ - $ 1,650 $ 23,725 October 1, 2011 Total comprehensive income for the period: Income for - - - 144 144 the period Effective - - 87 - 87 portion of changes in fair value of cash flow hedges - - 87 144 231 Stock-based - 59 - - 59 compensation Balance as at $ 19,960 $ 2,174 $ 87 $ 1,794 $ 24,015 December 31, 2011 Balance as at $ 19,960 $ 2,323 $ 116 $ 3,441 $ 25,840 September 30, 2012 Total comprehensive income for the period: Income for - - - 192 192 the period Issuance of 19 (4) - - 15 share capital Effective - - - (69) portion of (69) changes in fair value of cash flow hedges 19,979 2,319 47 3,633 25,978 Stock-based - 46 - - 46 compensation Balance as at $ 19,979 $ 2,365 $ 47 $ 3,633 $ 26,024 December 31, 2012 RDM CORPORATION Condensed Consolidated Interim Statements of Cash Flows (Amounts in thousands of U.S. Dollars) (Unaudited) Three months ended December 31 2012 2011 Cash provided by (used in): Operations: Income for the period $ 192 $ 144 Items not involving cash: Depreciation of property and 137 186 equipment Amortization of intangible 118 88 assets Stock-based compensation 46 59 Interest earned (12) (25) Exchange gains on cash held (100) (389) in foreign currency Change in non-cash operating 246 (252) working capital Cash provided by operations 627 (189) Interest received 15 11 Net cash provided by (used in) 642 (178) operations Financing: Issuance of share capital 15 - Repurchase of share capital - - Cash provided by financing 15 - activities Investing: Purchase of property and (216) (21) equipment Additions to intangible assets - - Cash used in investing activities (216) (21) Exchange gains on cash held in 28 476 foreign currency Increase in cash and cash 469 277 equivalents Cash and cash equivalents, 18,897 14,815 beginning of period Cash and cash equivalents, end of $ 19,366 $ 15,092 period Randy Fowlie CEO & President RDM Corporation (519) 746-8483 x340 email@example.com Rui Malhinha Chief Financial Officer RDM Corporation (519) 746-8483 x284 firstname.lastname@example.org SOURCE: RDM Corporation To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/January2013/31/c9954.html CO: RDM Corporation ST: Ontario NI: FIN ECOM CPR ELE ERN CONF -0- Jan/31/2013 12:00 GMT
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