Saskatoon, July 13, 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 improved results for the three and six months ended May 31, 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.
SECOND QUARTER HIGHLIGHTS:
Revenues for the second quarter of fiscal 2012 were $10.6 million compared to $10.7 million for the same period last year. For the first six months of fiscal 2012 revenues were $19.5 million, consistent with $19.6 million last year. Solid gains in revenues of the Company’s toll systems and higher-margin maintenance contracts were offset by reduced revenues from data collection systems and off-the-shelf product sales.
Revenues in the United States have increased in the first half of fiscal 2012 by 16% compared to the prior year and 3% for the second quarter as the business climate for the Company’s products has improved in the US market. The Company expects U.S. revenues for fiscal 2012 will be higher than those achieved in fiscal 2011. Revenues in Canada during six months ended May 31, 2012 declined to $1.1 million from $1.7 million in the prior year due primarily to reduced revenues from project deliveries in the current year and a major project delivery in 2011. Management believes revenues in Canada for fiscal 2012 will be lower than those realized in fiscal 2011. Offshore sales revenues during the first six months of fiscal 2012 were $6.9 million compared to $8.0 million in the same period in fiscal 2011. The decline is primarily the result of lower off-the-shelf product deliveries to the Company’s subsidiary 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 six months 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.
In late June 2012 the US Congress approved a fully-funded bill running through the end of fiscal 2014 titled "Moving Ahead for Progress in the 21st Century (MAP21)". The bill reauthorizes the Federal-aid highway program at current funding levels plus inflation for two fiscal years. With the passing of this legislation, both short term and longer term transportation projects will be able to proceed given the availability of federal funding. A number of these projects may include ITS technology requirements wherein IRD offerings and solutions may apply and thus the passing of this legislation potentially provides IRD increased business potential in North American markets, depending on which specific projects are approved and funded. As a minimum, with the passing of this legislation, it is expected that current IRD US business levels will remain strong for the next two years.
“We are very pleased to see this important funding legislation approved by the US congress,” stated Mr. Randy Hanson, Executive Vice President and COO. “Governments around the world recognize that improving their roadway and highway infrastructure is a key element in economic growth, and as a proven and well-respected supplier of products and systems to these global markets, we are confident IRD will benefit from these initiatives over the long term.”
Gross margin as a percentage of revenues improved significantly to 30.0% in the second quarter of fiscal 2012 from 16.0% in the same prior-year period, and to 28.4% for the first six months of fiscal 2012 compared to 19.7% for the first six months of fiscal 2011. The increase was due primarily to a return to more normal gross margin levels following significant project delays experienced by the Company’s subsidiary in India last year, and higher revenues from maintenance contracts in the current fiscal year.
“The turnaround in our Indian subsidiary, IRDSA, has been impressive and it continues to have a strong presence in that market. Additionally, we are seeing an increasing amount of revenue generated from recurring sources including data collection, ASP services, maintenance and operations contracts. This is consistent with our worldwide strategy and has resulted in an increase in revenue of almost 30% in this area since 2009”, said Mr. Terry Bergan, President and CEO.
Administrative and marketing expenses were stable at $5.1 million through the first six months of fiscal 2012 compared to $5.0 million in the prior year. Net research and development expenditures remained consistent at 2.6% of revenue. Interest expense declined in the first six months of fiscal 2012 compared to the prior year period primarily due to a reduced level of debt.
The Company recorded earnings before interest, taxes, depreciation and amortization (EBITDA) of $0.5 million in the second quarter of fiscal 2012 compared to a loss of $1.0 million in the same prior-year period. For the first six months of fiscal 2012 EBITDA was $0.2 million compared to a loss of $1.4 million for the same period in fiscal 2011. The increase in EBITDA is primarily due to the higher gross margin and foreign exchange gains in the current year compared to losses in the prior year.
The Company generated net income of $0.2 million or $0.02 per common share in the second quarter of fiscal 2012 compared to a net loss of $(0.9) million or $(0.06) per share for the same period last year. For the first six months of fiscal 2012 the Company incurred a net loss of $(0.3) million or $(0.02) per common share compared to a net loss of $(1.6) million or $(0.11) per common share last year.
The Company’s balance sheet at May 31, 2012 shows working capital of $7.0 million with a current ratio of 1.45 compared to $8.6 million and 1.58 at the same time last year. Cash flow from operating activities, after changes in non-cash working capital items, was $0.9 million through the first six months of fiscal 2012 compared to a use of cash of $2.1 million in the prior year. The Company’s debt to equity ratio is 48.9% at May 31, 2012 compared to 44.6% a year ago.
Financial Highlights (financial statements are available on the Company’s web site and SEDAR)
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