RDM Corporation Reports Third Quarter Financial Results
PR Newswire -- July 30, 2010
Toronto Stock Exchange Symbol: RC
WATERLOO, ON, July 30 /PRNewswire-FirstCall/ - RDM Corporation (TSX: RC), a leading developer of specialized software and hardware products for electronic payment processing, today reported its financial results for the three month period ended June 30, 2010.
Q3 2010 Highlights
- Total revenues were $4.8 million in the third quarter of fiscal 2010, compared to $5.9 million in the third quarter of 2009.
- Payment Processing Services segment revenues, which are recurring in nature, were $2.3 million in Q3 2010, compared to $2.5 million a year earlier.
- Transaction volumes for RDM's Image & Transaction Management System (ITMS(R)) averaged 3.6 million items per week during the third quarter, compared to 3.8 million items per week a year earlier, and 3.6 million items per week during Q2 2010.
- ITMS end user locations increased from 18,500 to 18,750 during the third quarter.
- RDM added two additional bank distributors and five new independent sales organizations (ISOs) during the quarter.
- The Company shipped 4,200 proprietary scanners in the third quarter, compared to 5,250 a year earlier.
- Gross profit was $1.8 million or 37% of revenues, compared to $2.5 million or 42% of revenues in the third quarter of 2009.
- Net loss was $1.0 million or $0.05 per share in Q3 2010, compared to net earnings of $0.2 million or $0.01 per share in Q3 2009. Foreign exchange was a loss of $365,000 in Q3 2010 versus a gain of $692,000 in Q3 2009. The change is due to the forward contracts.
- Cash and equivalents were $15.2 million at June 30, 2010, compared to $16.1 million at March 31, 2010.
"Results for the third quarter were disappointing and below management's expectations," said Douglas Newman, President and CEO of RDM Corporation. "Some expected scanner orders were delayed beyond quarter-end and new ITMS end user deployments by some of our bank customers were behind schedule."
In response to continued difficult market conditions the Company has:
- re-deployed its resources within the sales organization and re-directed them to our most profitable growth market segments and; - integrated and expanded its product features into its "Connect" scanner to be market-ready this September.
"Early indications are that the RDM Connect scanner will prove to be a successful product launch," said Mr. Newman. "RDM Connect is a feature rich product that is ideally suited to a number of markets. We've received initial orders and expect to start shipping units by the end of the fiscal year."
Mr. Newman continued: "We are working to find the right balance between positioning the Company for long-term growth and managing for current economic realities, and to that end, we have taken out over a half million dollars of third quarter operating expenses compared to last year."
Board Committee
A Committee of the Board of Directors has been established with the mandate to work with Management to enhance shareholder value. Management and the Board believe the intrinsic value of the Company is significantly understated, in part due to difficult market conditions. The Committee will work with Management to execute a plan to improve the operating results and enhance shareholder value.
Financial Review
Operating Results by Segment
For the Three Months Ended June 30, 2010
(In thousands Payment Digital Electronic of Canadian Processing Imaging Payment Quality dollars) Services Products Solutions Assurance Total
PR Newswire -- July 30, 2010
Toronto Stock Exchange Symbol: RC
WATERLOO, ON, July 30 /PRNewswire-FirstCall/ - RDM Corporation (TSX: RC), a leading developer of specialized software and hardware products for electronic payment processing, today reported its financial results for the three month period ended June 30, 2010.
Q3 2010 Highlights
- Total revenues were $4.8 million in the third quarter of fiscal 2010, compared to $5.9 million in the third quarter of 2009.
- Payment Processing Services segment revenues, which are recurring in nature, were $2.3 million in Q3 2010, compared to $2.5 million a year earlier.
- Transaction volumes for RDM's Image & Transaction Management System (ITMS(R)) averaged 3.6 million items per week during the third quarter, compared to 3.8 million items per week a year earlier, and 3.6 million items per week during Q2 2010.
- ITMS end user locations increased from 18,500 to 18,750 during the third quarter.
- RDM added two additional bank distributors and five new independent sales organizations (ISOs) during the quarter.
- The Company shipped 4,200 proprietary scanners in the third quarter, compared to 5,250 a year earlier.
- Gross profit was $1.8 million or 37% of revenues, compared to $2.5 million or 42% of revenues in the third quarter of 2009.
- Net loss was $1.0 million or $0.05 per share in Q3 2010, compared to net earnings of $0.2 million or $0.01 per share in Q3 2009. Foreign exchange was a loss of $365,000 in Q3 2010 versus a gain of $692,000 in Q3 2009. The change is due to the forward contracts.
- Cash and equivalents were $15.2 million at June 30, 2010, compared to $16.1 million at March 31, 2010.
"Results for the third quarter were disappointing and below management's expectations," said Douglas Newman, President and CEO of RDM Corporation. "Some expected scanner orders were delayed beyond quarter-end and new ITMS end user deployments by some of our bank customers were behind schedule."
In response to continued difficult market conditions the Company has:
- re-deployed its resources within the sales organization and re-directed them to our most profitable growth market segments and; - integrated and expanded its product features into its "Connect" scanner to be market-ready this September.
"Early indications are that the RDM Connect scanner will prove to be a successful product launch," said Mr. Newman. "RDM Connect is a feature rich product that is ideally suited to a number of markets. We've received initial orders and expect to start shipping units by the end of the fiscal year."
Mr. Newman continued: "We are working to find the right balance between positioning the Company for long-term growth and managing for current economic realities, and to that end, we have taken out over a half million dollars of third quarter operating expenses compared to last year."
Board Committee
A Committee of the Board of Directors has been established with the mandate to work with Management to enhance shareholder value. Management and the Board believe the intrinsic value of the Company is significantly understated, in part due to difficult market conditions. The Committee will work with Management to execute a plan to improve the operating results and enhance shareholder value.
Financial Review
Operating Results by Segment
For the Three Months Ended June 30, 2010
(In thousands Payment Digital Electronic of Canadian Processing Imaging Payment Quality dollars) Services Products Solutions Assurance Total
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