International Road Dynamics Inc. (TSX:IRD), one of the world's
leading providers of systems and solutions for the global
Intelligent Transportation Systems (ITS) market, today announced
solid growth in revenues and profitability for the three and nine
months ended August 30, 2012. Effective December 1, 2011 the
Company adopted and is reporting under International Financial
Reporting Standards ("IFRS"). Please refer to the Company's
Management
Discussion and Analysis and financial statements for the period
for a comprehensive description of the changes arising from the
transition.
THIRD QUARTER HIGHLIGHTS:
-- Revenues up 10% on growth in data collection systems, product sales and
maintenance contracts
-- Gross margin rises to 32.8% of revenues, up from 28.5% last year
-- EBITDA increases to $0.8 million from $0.5 million last year
-- Net income of $0.4 million or $0.03 per common share
-- Positive outlook for growth in revenues and profitability through
balance of fiscal 2012 and fiscal 2013
Revenues for the third quarter of fiscal 2012 were $11.1 million
compared to $10.1 million for the same period last year. For the
first nine months of fiscal 2012 revenues were $30.6 million, up
from $29.8 million last year.
Revenues in the United States for the first nine months of
fiscal 2012 rose 17% to $18.6 million from $15.9 million last year
due primarily to a large commercial vehicle system delivery in the
US southwest and improved business fundamentals in the US market
arising from a recently-approved funding bill passed by the US
Congress. Approximately 76% of the Company's revenues in the first
nine months of fiscal 2012 were denominated in US dollars.
Management expects US revenues for the full 2012 fiscal year will
be higher than those achieved in fiscal 2011. Revenues in Canada
during nine months ended August 30, 2012 declined to $2.1 million
from $2.7 million in the prior year primarily due to a reduction in
product deliveries this year and a major delivery in fiscal 2011.
Management believes revenues in Canada for fiscal 2012 will be
lower than those realized in fiscal 2011. Offshore sales revenues
for the first nine months of fiscal 2012 were $10.0 million
compared to $11.2 million in the same period in fiscal 2011. The
decline is primarily the result of lower off-the-shelf product
deliveries to the Company's subsidiary in China, reduced revenues
experienced by the Company's subsidiary in India, as well as
significant system deliveries in Asia and Latin America during the
first nine months of last year. The Company's subsidiary in Chile
continues to maintain its strong position in the Latin American
market and, over the long term, the Company's subsidiary in India
remains well positioned to take advantage of opportunities afforded
by the significant expansion in highway and toll systems in the
Southeast Asia region. With recent project awards and product
orders the Company expects that offshore revenues in fiscal 2012
will be higher than those achieved in fiscal 2011.
In late June 2012 the US Congress approved a fully-funded bill
running through the end of fiscal 2014 titled "Moving Ahead for
Progress in the 21rst Century (MAP21)". The bill reauthorizes the
Federal-aid highway program at current funding levels plus
inflation for two fiscal years. With the passing of this
legislation, both short term and longer term transportation
projects will be able to proceed given the availability of federal
funding. A number of these projects may include ITS technology
requirements wherein IRD offerings and solutions may apply and thus
the passing of this legislation potentially provides IRD increased
business potential in North American markets, depending on which
specific projects are approved and funded. As a minimum, with the
passing of this legislation, it is expected that current IRD US
business levels will remain strong for the next two years.
"In addition to the significant benefits this new US bill will
bring to our North American Intelligent Transportation Systems
(ITS) business, we continue to make positive strides across all of
our global platforms," commented Randy Hanson, Executive Vice
President and COO. "W e are very encouraged by the progress we are
seeing at IRDSA, our subsidiary in India, and expect to see
improved performance at XPCT, our ITS products and service provider
in China, going forward."
Gross margin as a percentage of revenues improved significantly
to 32.8% in the third quarter of fiscal 2012 from 28.5% in the same
prior-year period, and to 30.0% for the first nine months of fiscal
2012 compared to 22.7% for the first nine months of fiscal 2011.
The increase was due primarily to a return to more normal gross
margin levels following significant project delays experienced by
the Company's subsidiary in India last year, and increased revenues
from maintenance contracts and off-the-shelf product sales in the
current fiscal year.
"We are very pleased to see the growth in our business generated
so far this year, along with the increase in our profit margins and
net income, and we look for continued progress through the balance
of the year and into fiscal 2013," stated Terry Bergan, President
and CEO. "Looking ahead, we are confident fundamentals will remain
strong in all of our markets, and we continue to examine
opportunities to grow and extend our business around the
world."
Administrative and marketing expenses were stable at $7.7
million or 25.2% of revenues through the first nine months of
fiscal 2012 compared to $7.5 million or 25.2% of revenues in the
prior year. Net research and development costs were $0.8 million
year-to-date in fiscal 2012, consistent with $0.7 million in the
prior year. Interest expense declined in the first nine months of
fiscal 2012 compared to the prior year period due primarily to
reduced long-term debt resulting from the sale of the Company's
head office in the second quarter of fiscal 2011, partially offset
by higher average balances in its line of credit in the current
year.
The Company recorded a strong 62% increase in earnings before
interest, taxes, depreciation and amortization (EBITDA) to $0.8
million in the third quarter of fiscal 2012 from $0.5 million in
the same prior-year period. For the first nine months of fiscal
2012 EBITDA was $1.0 million compared to a loss of $0.8 million for
the same period in fiscal 2011. The increase in EBITDA is primarily
due to the higher gross margin in the current year.
The Company generated net income of $0.4 million or $0.03 per
common share in the third quarter of fiscal 2012 compared to $0.2
million or $0.01 per common share for the same period last year.
For the first nine months of fiscal 2012 the Company generated net
income of $0.1 million or $0.01 per common share compared to a net
loss of $1.4 million or ($0.10) per common share last year.
The Company's balance sheet remained solid at August 30, 2012
with working capital of $7.7 million compared to $9.4 million at
the same time last year and a current ratio of 1.5 times. Cash flow
from operating activities, after changes in non-cash working
capital items, was $2.0 million through the first nine months of
fiscal 2012 compared to a use of cash of $2.9 million in the prior
year resulting in a debt to equity ratio of 36%.
Financial Highlights (financial statements are available on the
Company's web site www.irdinc.com )
Three Months Nine Months
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Period ended August 31, 2012 2011 2012 2011
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(in $000's except per share amounts) $ $ $ $
Revenue 11,126 10,119 30,616 29,753
EBITDA 828 511 1,007 (846)
Net earnings (loss) 378 173 100 (1,397)
Net earnings (loss) per common share
(Basic & Diluted) 0.03 0.01 0.01 (0.10)
Total Assets 32,730 35,438
Total Long-Term Financial Liabilities - 1,300
Working Capital 7,651 9,390
Shareholders' Equity per Share 1.23 1.39
Common Shares Outstanding 13,998 13,998
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Certain statements contained in this news release constitute
forward-looking information within the meaning of securities laws.
Implicit in this information, particularly in respect of future
operating results and economic performance of the Company, are
assumptions regarding projected revenue and expenses. These
assumptions, although considered reasonable by the Company at the
time of preparation, may prove to be incorrect. Readers are
cautioned that actual future operating results and economic
performance of the Company are subject to a number of risks and
uncertainties, including general economic, market and business
conditions and could differ materially from what is currently
expected. For more exhaustive information on these risks and
uncertainties, please refer to our most recently filed annual
information form, available at www.sedar.com. Forward-looking
information contained in this report is based on management's
current estimates, expectations and projections, which management
believes are reasonable as of the current date. You should not
place undue importance on forward-looking information and should
not rely upon this information as of any other date. While we may
elect to do so, we are under no obligation and do not undertake to
update this information at any particular time unless required by
applicable securities law.
As used herein, "EBITDA" means earnings before interest, income
taxes, depreciation, and amortization, and includes gains or losses
from foreign exchange and earnings or losses from the Company's
equity investments. EBITDA is not a recognized measure under
International Financial Reporting Standards ("IFRS"). Management
believes that EBITDA is a useful supplemental measure to net
earnings (loss), as it provides investors with an indication of
operating performance prior to debt service, capital expenditures
and income taxes. Investors should be cautioned, however, that
EBITDA should not be construed as an alternative to net earnings
(loss) determined in accordance with IFRS as an indicator of the
Company's performance or to cash flows from operating, investing
and financing activities as a measure of liquidity and cash flows.
The Company's method of calculating EBITDA may differ from the
methods by which other companies calculate EBITDA and, accordingly,
EBITDA may not be comparable to measures used by other
companies.
IRD is a highway traffic management technology company
specializing in supplying products and systems to the global
Intelligent Transportation Systems (ITS) industry. IRD is a North
American company based in Saskatoon, Saskatchewan Canada with sales
and service offices throughout the United States and overseas.
Private corporations, transportation agencies and highway
authorities around the world use IRD's products and advanced
systems to manage and protect their highway infrastructures.
The Company's shares trade on the Toronto Stock Exchange under
the symbol IRD.
Contacts: International Road Dynamics Inc. Terry Bergan
President & CEO (306) 653-6600 or U.S. (303) 355-5998
International Road Dynamics Inc. Francine Senecal-Lepage Investor
Relations (306) 653-6603 (306) 653-6609 (FAX)irdir@irdinc.com
www.irdinc.com