Another Rock solid quarter Due to the seasonal nature of the business, the first quarter of each year is typically a slower quarter. Sales were $8.5 million and strong cash flows boosting cash and liquid investment to nearly $10 million vs just over $7 million at the end of Dec. Net earnings were 3 cents per share and backlog was $30 million.
With the end of the European upgrade cycle in 2011, DD introduced an extensive product suite last year,
including enhancements to the V800TM, the V5000TM, our white label mobile booking applications, and
the Connectivity Box with a tablet enabled enterprise solution to further engage the North American
market. We are beginning to see some of the benefits, but it will take some time for the North American
market to absorb these offerings and continue their upgrade cycle. Despite the challenges that our first
quarter normally brings, revenues were in line with expectations at $8.5 million and recurring revenue
was 70% of revenue in the quarter. Adjusted gross margin yield(2) also showed improvement at
46%, an increase of two percentage points from the first quarter of 2012.. The improved gross margin yield is driven by higher margins in recurring revenue streams, largely a result of higher revenues from r maintenance revenue streams as customers begin to exit their warranty periods.
Continuing with the momentum DD built throughout the second half of 2012, They continue to tune,
monitor and manage our operating expenditures (“OPEX”) which saw a decrease of $0.2 million in the
quarter compared to 2012.
Net finance income was a significant contributor to the net income for the quarter. The strength of the
Canadian dollar has an impact on both our revenue and gross margin, but also generated a significant
foreign exchange gain on translation for the quarter of $0.3 million. In addition, the revaluation of the
Company’s marketable security resulted in a gain for the quarter of $0.6 million. In aggregate, net
finance income was $0.9 million.
Onwards and upwards..