RDM Corporation second quarter revenue down due to dollar rate
WATERLOO--RDM Corporation, a leading developer of specialized software and hardware products for electronic payment processing, today reported its financial results for the three month period ended March 31, 2010.
"In the second quarter we made progress on all of our key metrics - including scanner sales, ITMS end user locations, and number of channel partners - but our overall financial results were suppressed by the impact of shifting exchange rates," said Douglas Newman, President and CEO of RDM Corporation. "We are focused on achieving the right balance between managing short-term costs and ensuring we are well positioned to capitalize on what I continue to believe is a significant long-term opportunity in the remote deposit capture space."
RDM generated total revenues of $5.2 million in the three months ended March 31, 2010, a decrease of $0.5 million from the second quarter of the previous year. The majority of the decrease was attributable to a $1.0 million impact from a shift in currency exchange rates over the past year, partially offset by an increase in scanner sales.
Payment Processing Services segment revenues of $2.3 million represented a decrease of $277,000 from a year earlier, as the positive impact of growth in ITMS end user locations was offset by the effect of exchange rates. Revenues in the Digital Imaging Products segment increased $148,000 to $2.6 million, driven by an increase in scanner sales, and in particular by sales of the EC7500(R) scanner. The Electronic Payments Solutions segment and the Quality Assurance segment, which represented a combined 7% of total revenues for the quarter, generated revenues of $87,000 and $258,000, respectively, compared to $522,000 and $229,000, respectively, in Q2 2009.
Gross profit of $1.9 million in Q2 2010 was down from $2.6 million in the second quarter of the previous year. Expressed as a percentage of revenues, the overall gross margin was 37%, compared to 45% a year earlier. Decreased margins were due to the impact of exchange rates.
Sales and marketing expense was $0.9 million in Q2 2010, a decrease of $0.3 million or 24% from the previous year when the Company made a significant investment in signing new channel partners and launching Simply Deposit(TM). Research and development expenses increased 10% to $1.2 million as the Company continued to invest in new product development including the RDM Connect(TM) scanner and new ITMS functionality such as accounts receivable integration. General and administration expenses increased 6% to $456,000.
Net loss was $0.9 million in the second quarter of 2010, or $0.04 per share, compared to a net loss of $0.9 million or $0.04 per share a year earlier. The Q2 2010 results include a $0.4 million restructuring charge incurred due to staffing reductions made during the quarter. Foreign exchange represented a gain of $288,000 in the second quarter of 2010 compared to a loss of $563,000 in Q2 2009.
RDM repurchased 17,000 shares during the second quarter under its Normal Course Issuer Bid. At March 31, 2010, the Company had 20.75 million common shares outstanding.
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.