International Road Dynamics Inc.
TSX : IRD

International Road Dynamics Inc.

October 05, 2007 09:35 ET

IRD Announces Continued Growth in Third Quarter 2007

SASKATOON, SASKATCHEWAN--(Marketwire - Oct. 5, 2007) - International Road Dynamics Inc. (TSX:IRD) (IRD) announced today results for the three and nine months ended August 31, 2007.

HIGHLIGHTS:

- Sales up 13.7% in third quarter and 31.5% through first nine months of fiscal 2007

- Recurring maintenance and service contract business continues to increase

- Fourth consecutive quarter of year-over-year revenue growth

Sales in the third quarter of fiscal 2007 rose 13.7% to $10.4 million from $9.1 million last year. For the nine months ended August 31, 2007 sales increased 31.5% to $29.8 million from $22.7 million in the prior year. The higher sales in fiscal 2007 are due primarily to increased orders for the Company's weigh station and data collection systems, standard products, and service contract renewals. Revenues in the United States continued to increase due primarily to increased revenue from maintenance contracts and increased sales of IRD manufactured products and integrated systems resulting from the passage of the new Federal Transportation Bill. Canadian sales were up in fiscal 2007 over last year primarily due to the delivery and installation of data collection sites and sales of the Company's new in-vehicle driver management systems. Overseas sales were also strong in fiscal 2007 due to continuing strong performance at the Company's Chilean subsidiary. With recent project awards in India, overseas sales are expected to rise through the balance of the year.

"We were pleased with our results in the third quarter as we generated solid growth in most of our geographic markets," commented Terry Bergan, President and CEO. "Our North American business continues to meet expectations and we are pleased to see a larger portion of this business in data services and recurring revenues. In addition, business in our international regions continues to grow."

IRD remains the world's largest provider of Weigh-In-Motion systems. The Company has an installed base of several thousand Intelligent Transportation Systems (ITS) systems worldwide.

Gross margins were maintained in fiscal 2007. As a percentage of sales, gross margin was 30.2% and 31.6% for the three and nine months ended August 31, 2007 respectively compared to 29.9% and 31.6% of sales respectively in the same periods last year.

Earnings before interest, taxes, depreciation and amortization (EBITDA) were $961,522 in the third quarter and $3,118,640 for the first nine months of fiscal 2007 compared to $830,724 and $1,713,594 for the same periods last year.

Administrative and marketing expenses have increased in fiscal 2007 due to the increase in the Company's business levels. However, as a percentage of sales, these expenses decreased to 21.0% through the nine months ended August 31, 2007 compared to 23.0% in the same period last year. Research and development costs have increased in fiscal 2007 as the Company expands its product lines and enhances its current product offerings.

Amortization expense has risen primarily due to license rights acquired in the first quarter of the year and equipment installed in the North Carolina vehicle pre-clearance program.

The Company generated net earnings of $297,786 or $0.02 per common share for the three months ended August 31, 2007 compared to $362,080 or $0.03 per common share for the same period last year. For the first nine months of fiscal 2007 net earnings were $1,399,204 or $0.10 per share compared to $700,164 million or $0.05 per share last year.

Beginning in the first quarter of fiscal 2007, the Company initiated a project to increase production capacity and efficiency with the construction of a new manufacturing facility adjacent to the Company's head office in Saskatoon. The Company also invested in new capital assets in fiscal 2007, including computer hardware and software upgrades, equipment acquired for use in the transponder administrator project in North Carolina, and other equipment.

Primarily as a result of strong earnings and positive net changes in non-cash working capital balances, the Company generated cash flow from operating activities of $4.164 million through the first nine months of fiscal 2007 compared to $733,783 in the same period last year. IRD's balance sheet remained strong at the end of the third quarter with working capital of $7.4 million compared to $9.9 million at the end of last year. Shareholders equity stood at $16.7 million or $1.20 per common share as at August 31, 2007.

"With the significant growth being experienced in the global ITS market, we believe the investments we are making in our sales and marketing efforts, as well as improving our systems and production facilities, will further assist us in capturing increased market share and growing our business over the long term for the benefit of our shareholders," Mr. Bergan concluded.

Financial Highlights (financial statements are available on the Company's web site www.irdinc.com)



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Three Months Nine Months

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Period Ended August 31, 2007 2006 2007 2006
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(in $,000 except per share amounts)
Sales 10,399 9,147 29,819 22,671
EBITDA 962 831 3,119 1,714
Net Earnings 298 362 1,399 700
Net Earnings per Common Share
(basic) $0.02 $0.03 $0.10 $0.05
Working Capital 7,391 9,690
Shareholders' Equity per Share $1.20 $1.05
Common Shares Outstanding 13,924 13,867
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Certain statements in this discussion may include "forward-looking" statements which involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of International Road Dynamics Inc. to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this discussion, such statements use such words as "may", "will", "expect", "anticipate", "project", "believe", "plan", and other similar terminology. The risks and uncertainties are detailed from time to time in reports filed by the Corporation with the securities regulatory authorities in applicable provinces and territories of Canada. New risk factors may arise from time to time and it is not possible for management to predict all of those risk factors or the extent to which any factor or combination of factors may cause actual results, performance and achievements of the Corporation to be materially different from those contained in forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

As used herein, "EBITDA" means earnings before interest, income taxes, depreciation, and amortization, and includes gains or losses from foreign exchange and gains or losses from the Company's equity investment in PAT Brazil. EBITDA is not a recognized measure under Canadian generally accepted accounting principles ("GAAP"). 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 GAAP as an indicator of the Corporation's performance or to cash flows from operating, investing and financing activities as a measure of liquidity and cash flows. The Corporation'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.

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 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.

The Company's shares trade on the Toronto Stock Exchange under the symbol IRD.

IRD is listed on the TSX - trading symbol - IRD

Contact Information

  • International Road Dynamics Inc.
    Terry Bergan
    President & CEO
    (306) 653-6600 or U.S. (303) 355-5998
    or
    International Road Dynamics Inc.
    Francine Senecal-Lepage
    Investor Relations
    (306) 653-6603
    (306) 653-6609 (FAX)
    Email: irdir@irdinc.com
    Website: www.irdinc.com