Mr. Randy Fowlie reports
RDM CORPORATION REPORTS FISCAL 2016 SECOND QUARTER FINANCIAL RESULTS
RDM Corp. has released its financial results for the three and six months ended March 31, 2016. All financial results are reported in thousands of U.S. dollars unless otherwise stated.
"We executed on the continued growth opportunities within our payment processing business, this quarter," said Randy Fowlie, president and chief executive officer of RDM. "The 15-per-cent increase in high-margin recurring revenue, largely offset weakness in our digital imaging business that was due to a restructuring at one of our resellers. As such, we achieved overall gross margin improvements, strong cash from operations and healthy bottom line results. We remain confident in our ability to deliver further growth in our payment processing business through new deployments and expansion within our existing customers, and expect revenue from digital imaging to be stronger in the second half of the year."
Q2 fiscal 2016 highlights (unless otherwise noted, comparisons are made between Q2 fiscal 2016 and Q2 fiscal 2015)
- Total revenue was $5,139 compared with $5,758;
- Recurring payment processing revenue was $3,846, up 15 per cent from $3,356;
- Total payment processing revenue was $3,963, a 12-per-cent increase from $3,544;
- Digital imaging revenue was $1,176 compared with $2,214;
- Gross margin was 69 per cent, up from 60 per cent;
- Operating income was $925 compared with $1,059;
- Adjusted EBITDA was $1,368 compared with $1,431;
- Net income was $669 compared with $789;
- Generated $1,960 in cash from operations, up 216 per cent compared with $621, and ended the quarter with $29,088 in cash and cash equivalents;
- End user seats were 46,736 seats, up 17 per cent and 3 per cent over Q2 fiscal 2015 and Q1 fiscal 2016, respectively;
- The board declared a quarterly cash dividend of two cents per common share;
- Released new single-feed network check scanner.
Year-to-date fiscal 2016 highlights (unless otherwise noted, comparisons are made between year-to-date fiscal 2016 and fiscal 2015)
- Total revenue was $10,568 compared with $11,604;
- Recurring payment processing revenue was $7,586, up 15 per cent from $6,599;
- Total payment processing revenue was $7,803, a 12-per-cent increase from $6,941;
- Digital imaging revenue was $2,765 compared with $4,663;
- Gross margin was 68 per cent, up from 59 per cent;
- Operating income was $2,375 compared with $2,076;
- Adjusted EBITDA was $3,129, up 11 per cent from $2,807;
- Net income was $1,695 compared with $1,912;
- Generated $3,375 in cash from operations, up 129 per cent compared with $1,473.
Dividend
A quarterly dividend of two cents per share will be paid on June 6, 2016, to shareholders of record on May 23, 2016. The dividends are designated as eligible dividends for the purpose of Section 89 of the Income Tax Act (Canada).
Conference call
RDM will be hosting a conference call to discuss the company's fiscal 2016 second quarter results on Thursday, April 28, 2016, at 9 a.m. ET. Dial-in numbers are 647-427-7450 or 1-888-231-8191. The call will be webcast and archived on the company website. Detailed financial results and management's discussion and analysis will be filed on
SEDAR.
Non-IFRS measures
Adjusted earnings before interest, taxes, depreciation and amortization adjusted for foreign exchange gains and losses, stock-based compensation and one-time charges (adjusted EBITDA) and operating income do not have any standardized meaning prescribed by international financial reporting standards (IFRS) and may not be comparable with similar measures presented by other companies. Adjusted EBITDA is provided to assist management and investors in determining the company's approximate operating cash flow before interest, income taxes, and depreciation and amortization, foreign exchange, stock-based compensation, and one-time charges. Management believes that RDM shareholders and potential investors in RDM use non-IFRS financial measures such as adjusted EBITDA and operating income in making investment decisions about the company and measuring the operational results.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF INCOME
(Amounts in thousands of U.S. dollars, except per-share data)
Three months ended March 31, Six months ended March 31,
2016 2015 2016 2015
Revenue
Payment processing services $ 3,963 3,544 7,803 6,941
Digital imaging products 1,176 2,214 2,765 4,663
5,139 5,758 10,568 11,604
Cost of revenue 1,605 2,322 3,388 4,735
Gross profit 3,534 3,436 7,180 6,869
Operating expenses
Sales and marketing 678 737 1,359 1,487
Research and development 1,266 1,143 2,251 2,306
General and administration 665 497 1,195 1,000
2,609 2,377 4,805 4,793
Operating income 925 1,059 2,375 2,076
Other items
Foreign exchange gain (loss) 3 (31) (4) (15)
Interest income 27 16 50 31
Other income - - - 120
30 (15) 46 136
Income before income taxes 955 1,044 2,421 2,212
Income tax expense
Current 415 255 832 300
Deferred (129) - (106) -
286 255 726 300
Net income 669 789 1,695 1,912
Earnings per share -- basic and diluted 0.03 0.04 0.07 0.09
Weighted average common shares
outstanding during the period 22,569,351 21,849,351 22,306,851 21,836,851
(Not audited or reviewed by the company's external auditor)
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in thousands of U.S. dollars)
Three months ended March 31, Six months ended March 31,
2016 2015 2016 2015
Net income $ 669 789 1,695 1,912
Other comprehensive income:
Effective portion of changes in
fair value of cash flow hedges 41 (38) - (85)
Comprehensive income 710 751 1,695 1,827
(Not audited or reviewed by the company's external auditor) We seek Safe Harbor.
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