SASKATOON, SASKATCHEWAN--(Marketwired - July 15, 2013) - 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 improved results for the three and six months ended May 31, 2013.
Q2 2013 HIGHLIGHTS:
- Net earnings of $619,582 for the second quarter continued a trend of improved year-over-year comparative quarterly financial performance
- Gross margin percentages increased for second consecutive quarter due to product mix
- An increase in recurring service revenues contributed to earnings and stability of cash flows
- XPCT investment in China generated significant earnings
- Subsidiary in Chile continued to grow generating an increased contribution to operating results
- Strong financial position maintained with positive working capital of $7.7 million
"We continued to capitalize on strengthening North American markets and our solid presence in Latin America," commented Terry Bergan, President and CEO. "Importantly, profit margins also strengthened due to higher margin sales and the benefits of our cost control and production efficiency initiatives. We look for this progress to continue going forward."
Revenues in the second quarter of fiscal 2013 rose 6.4% to $11.2 million compared to $10.6 million for the same period last year. Following a weaker first quarter of the year, revenues for the six months ended May 31, 2013 were $19.1 million compared to $19.5 million last year.
Revenues in the Company's Canadian and United States markets rose 13.2% in the second quarter compared to the same period in the prior year as favourable business conditions allowed a number of project orders to commence. Management continues to believe that its North American business will grow over the near term due to a recently-approved funding bill passed by the U.S. Congress and a growing backlog of orders.
Latin American revenues, originating from the Company's successful subsidiary in Chile, increased by 9.1% in the quarter compared to last year reflecting the Company's strong market presence and the commencement of a major project in Paraguay. The Company continues to identify and add new sales opportunities in a number of countries in the Latin America region.
South Asian revenues originating from the Company's subsidiary in India declined in the quarter reflecting management's decision to be more selective in the contracts entered into in this market. The Company remains focused on maintaining its recurring service operations and completing existing major projects by the end of the year while also realigning operating costs to match current business opportunities over the near term.
Other International revenues, which are primarily composed of product sales, declined in the quarter mainly due to delayed purchasing decisions across the Company's worldwide customer base. This segment of the Company's business is subject to wide variability on a quarter-to-quarter basis.
For the three months ended May 31, 2013 the Company reported improved earnings of $213,608 from its 50% equity investment in XPCT in China compared to $5,391 in the same prior year period arising from the continued success of its wiring harness business and positive earnings from its traffic business. The Company received dividends of $491,601 from XPCT through the first six months of the fiscal year.
Gross margin as a percentage of revenues improved significantly to 33.3% in the second quarter of fiscal 2013 from 30.0% in the same prior year period due primarily to increased higher-margin service revenues and product sales this year. For the first six months of fiscal 2013 gross margins strengthened to 33.1% of revenues from 28.4% last year.
Administrative and marketing expenses increased compared to the prior year due primarily to higher selling costs in its Latin America operations resulting in the higher sales revenues. However, as a percentage of revenue, administrative and marketing expenses remained consistent with the prior year. Net research and development costs increased due to accelerated technology development programs aimed at adding to the functionality of its products. Interest costs were higher due to increased borrowing levels and higher interest rates on the Company's credit lines.
The Company continued to demonstrate a trend of improved year-over-year quarterly performance as earnings before interest, taxes, depreciation and amortization ("EBITDA") increased to $975,226 in the second quarter of 2013 from $532,209 in the same prior year period. For the six months ended May 31, 2013 EBITDA was $784,867 compared to $209,703 last year.
The Company generated net earnings of $619,582 ($0.05 per share) in the second quarter, up from $235,457 ($0.02 per share) last year. For the first six months of fiscal 2013, net earnings were $236,582 ($0.02 per share) as compared to a net loss of $277,462 (net loss of $0.02 per share) in the prior year.
The Company's balance sheet remained solid at May 31, 2013 with working capital of $7.7 million. Cash flows from operating activities rose by $1.2 million for the six months ended May 31, 2013 compared to $0.9 million in the prior year period due primarily to improved net earnings and a reduction in accounts receivable and unbilled revenues.
Financial Highlights (financial statements are available at www.irdinc.com )
|
Three Months |
|
Six Months |
|
| Periods ended May 31 |
2013 |
|
2012 |
|
2013 |
|
2012 |
|
| (in $000's except per share amounts) |
$ |
|
$ |
|
$ |
|
$ |
|
| Revenue |
11,245 |
|
10,573 |
|
19,054 |
|
19,489 |
|
| Gross margin |
3,747 |
|
3,172 |
|
6,309 |
|
5,534 |
|
| Gross margin percentage of revenue (%) |
33.3 |
% |
30.0 |
% |
33.1 |
% |
28.4 |
% |
| EBITDA |
975 |
|
532 |
|
785 |
|
210 |
|
| Net earnings (loss) |
620 |
|
235 |
|
237 |
|
(277 |
) |
| Net earnings (loss) per common share (basic) |
0.05 |
|
0.02 |
|
0.02 |
|
(0.02 |
) |
| Working capital |
|
|
|
|
7,728 |
|
6,972 |
|
| Shareholders' equity per share |
|
|
|
|
1.22 |
|
1.20 |
|
| Common shares outstanding |
|
|
|
|
13,998 |
|
13,998 |