Saskatoon, May 14, 2012 - International Road Dynamics Inc. (TSX: IRD), the world’s largest provider of Weigh-In-Motion systems and solutions for the global Intelligent Transportation Systems (ITS) market, today announced results for the three months ended February 29, 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. Certain comparative figures for first quarter 2011 have been restated to reflect the adoption of IFRS.
Sales for the first quarter of fiscal 2012 were $8.9 million compared to $8.9 million for the same period last year. Solid gains in revenues from sales of the Company’s commercial vehicle systems and maintenance contracts were offset by reduced revenues from toll systems and off-the-shelf product sales.
Revenues in the United States for the first quarter of fiscal 2012 rose to $5.2 million from $3.9 million in the prior year due primarily to a large commercial vehicle system delivery in the U.S. southwest. Approximately 70% of the Company’s sales in the first quarter were denominated in U.S. dollars. Management expects U.S. revenues for the 2012 fiscal year will be higher than those achieved in fiscal 2011. Revenues in Canada during the first quarter were $0.4 million compared to $0.6 million in the prior year primarily due to a reduction in new orders over the last two fiscal quarters. Management believes revenues in Canada for fiscal 2012 will be consistent with those realized in fiscal 2011. Offshore sales revenues during this first quarter were $3.2 million compared to $4.5 million in the first quarter of fiscal 2011. The decline is primarily the result of lower off-the-shelf product deliveries to the Company’s equity investee 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 quarter 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.
“Once again the diversification of our revenue streams, both geographically and by product line, has helped us mitigate the challenges in certain segments of our markets,” stated Terry Bergan, President and CEO. “We were very pleased to see the solid growth in our North and South American regions, and as our Southeast Asian and China business improves, we believe we will see more profitable growth in the quarters ahead.”
Gross margin as a percentage of sales was 26.5% in the first quarter of fiscal 2012, up from 24.1% in the first quarter of fiscal 2011. The increase was due primarily to higher gross margins being realized on product sales by the Company’s subsidiary in Chile and the positive impact of the U.S. dollar, partially offset by reduced gross margin realized at the Company’s subsidiary in India.
Administrative and marketing expenses were stable at $2.4 million in the first quarter of fiscal 2012 compared to $2.4 million in the prior year. Net research and development costs were reduced to $0.2 million from $0.3 million in the prior year’s first quarter. Interest expense declined in the first quarter of fiscal 2012 compared to the comparable prior year period primarily due to a reduced level of debt.
The Company recorded a loss before interest, taxes, depreciation and amortization (EBITDA) of $(0.3) million in the first quarter of fiscal 2012 compared to a loss of $(0.4) million in the same prior year period. The increase in EBITDA is primarily due to the higher gross margin and lower R&D costs compared to the prior year. The Company incurred a net loss of $(0.5) million or $(0.04) per common share in the first quarter of fiscal 2012 compared to a net loss of $(0.7) million or $(0.05) per share for the same period last year.
The Company’s balance sheet remained solid at February 29, 2012 with working capital of $7.0 million compared to $3.5 million at the same time last year. Cash flows from operating activities including changes in non-cash working capital items, was $61,000 compared to a use of cash of $838,000 in the prior year’s first quarter. The Company’s current ratio remained strong at 1.4 times with a solid debt to equity ratio of 46%.
Financial Highlights (financial statements are available on the Company’s web site www.irdinc.com )
As used herein, "EBITDA" means earnings before interest, income taxes, depreciation, and amortization, and includes gains or losses from foreign exchange and derivatives, and earnings or losses from the Company’s equity accounted 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. The following is a reconciliation of EBITDA to net loss:
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.
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.
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The Company's shares trade on the Toronto Stock Exchange under the symbol IRD.
FOR MORE INFORMATION PLEASE CONTACT:
President & CEO
Phone: (306) 653-6600
U.S. (303) 355-5998
Phone: (306) 653-6603
Fax: (306) 653-1454
IRD is listed on the TSX - trading symbol - IRD