Q3....Firing on All Cylinders !Int'l Road Dynamics earns $534,000 in Q3 2013 2013-10-09 06:28 ET - News Release Mr. Terry Bergan reports IRD ANNOUNCES CONTINUED GROWTH IN THIRD QUARTER FISCAL 2013 International Road Dynamics Inc. has had continued growth for the three and nine months ended Aug. 31, 2013. HIGHLIGHTS: -- Revenues continue to increase on solid growth in US and Latin American markets -- Increasing recurring service revenues contributes to improved profitability and stability of cash flows -- Gross margins increase on higher margin service and project revenues -- China XPCT investment contributes strong year to date performance -- Year to date EBITDA up 85% to $1.9 million over prior year to date -- Year to date net earnings rise to $770,607 or $0.05 per common share from $100,092 or $0.01 per share in prior year to date -- Strong financial position maintained with positive working capital of $7.8 million "A strengthening global economy is resulting in an improved outlook for the worldwide ITS industry and for IRD as investments in highway and roadway infrastructure and support systems are increasing in our key markets," commented Terry Bergan, President and CEO. "In particular, we are seeing solid growth in our US markets as favourable economic conditions have permitted a number of large projects to commence, while our Latin American business continues to generate strong revenue increases as we enhance our presence in a number of current and new regions." Mr. Bergan continued: "We are also pleased to see another quarter of increasing profit margins due to a higher-margin sales mix and the continuing benefits of our cost control and production efficiency initiatives. We look for this progress to continue." Revenues in the third quarter of fiscal 2013 rose 8.0% to $12.0 million compared to $11.1 million for the same period last year. For the nine months ended August 31, 2013 revenues were $31.1 million compared to $30.6 million last year. Revenues in the Company's Canadian and United States markets rose 11.0% in the third quarter compared to the prior year as favourable economic conditions allowed a number of project orders to commence. For the nine months ended August 31, 2013 Canadian and U.S. revenues rose 2.5% compared to the prior year. Management continues to believe that its North American business will grow over the near term due to a growing backlog of orders. Latin American revenues, originating from the Company's subsidiary in Chile, increased 63.8% to $1.6 million in the quarter compared to last year reflecting the Company's strong market presence and two major project deliveries in the region. Year to date revenues in Latin America have risen 36.5% to $5.1 million. 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 while also working towards a realignment of its operations to increase product sales across a wider range of industries. Other International revenues, which include all other overseas sales originating from North America, increased strongly in the third quarter, with year to date revenues up 9.0% over the prior year. For the three months ended August 31, 2013 the Company reported improved earnings of $293,593 from its 50% equity investment in XPCT in China compared to $65,812 in the same prior year period. For the first nine months of 2013 earnings from XPCT were $503,662 compared to a loss of $2,243 in the prior year. The improved performance in fiscal 2013 is due to continued growth in the Company's wire harness business and positive earnings from its traffic business. The Company received dividends of $491,601 from XPCT in the first quarter of the fiscal year. Gross margin as a percentage of revenues is 32.7% year to date in fiscal 2013 compared to 30.0% in the prior year. The improved profitability in fiscal 2013 is due primarily to increased higher-margin service revenues and high margin project revenues this 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. Net research and development costs increased compared to the prior year, as the Company continues to develop new products and add to the functionality of existing 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 $1.2 million in the third quarter of 2013 from $0.8 million in the same prior year period. For the nine months ended August 31, 2013 EBITDA rose 85.0% to $1.9 million from $1.0 million last year. The Company generated net earnings of $534,025 ($0.04 per share) in the third quarter compared to $377,554 ($0.03 per share) last year. Net income in the third quarter of fiscal 2013 was negatively affected by additional losses in the Company's Indian subsidiary arising from bad debt provisions. Due to uncertainty that sufficient future earnings will be generated in the Company's Indian subsidiary to offset current tax losses prior to their expiry, no provision for income tax recovery has been recorded in this entity during fiscal 2013 as in prior years. For the first nine months of fiscal 2013 the Company reported net earnings of $770,607 ($0.05 per share) compared to $100,092 ($0.01 per share) in the prior year. The Company's balance sheet remained solid at August 31, 2013 with working capital of $7.8 million compared to $7.0 million as at November 30, 2012. Cash flows from operating activities rose by $2.0 million for the nine months ended August 31, 2013 compared to $1.4 million in the prior year period due primarily to the improved net earnings in the current year. Financial Highlights (financial statements are available at www.irdinc.com) Three Months Nine Months Periods ended August 31 2013 2012 2013 2012 ---------------------------------------------------------------------------- (in $000's except per share amounts) $ $ $ $ Revenue 12,015 11,126 31,069 30,616 Gross margin 3,836 3,654 10,145 9,188 Gross margin percentage of revenue (%) 31.9% 32.8% 32.7% 30.0% EBITDA 1,152 837 1,937 1,047 Net earnings 534 378 771 100 Net earnings per common share (basic) 0.04 0.03 0.05 0.01 Working capital 7,775 7,651 Shareholders' equity per share 1.25 1.23 Common shares outstanding 13,998 13,998 ---------------------------------------------------------------------------- We seek Safe Harbor.