International Road Dynamics Inc.
TSX : IRD

International Road Dynamics Inc.

October 13, 2009 07:00 ET

IRD Announces Continuing Strong Third Quarter 2009 Results

SASKATOON, SASKATCHEWAN--(Marketwire - Oct. 13, 2009) - International Road Dynamics Inc. (IRD) (TSX:IRD), the world's largest provider of Weigh­-In-­Motion systems and solutions for the global Intelligent Transportation Systems (ITS) market, today announced strong results for the three and nine months ended August 31, 2009.

THIRD QUARTER HIGHLIGHTS:

  • Record quarterly sales, up 33% on strong growth in US and Offshore markets
  • Offshore sales grow 37% on strength in Asia and Latin America
  • Operating and overhead costs reduce as percentage of sales
  • EBITDA increases 26% on strong revenue growth
  • Net earnings of $0.03 per share compared to $0.01 per share last year

Sales for the third quarter of fiscal 2009 increased 33.1% to $13.6 million compared to $10.2 million for the same period last year. For the first nine months of fiscal 2009, sales were up 37.4% to $36.2 million compared to $26.4 million for the same period last year. The Company generated increased sales across the majority of its geographic regions and product lines through the first nine months of the fiscal year.

Offshore sales continued to grow in the quarter, rising 36.6% to $5.8 million compared to $4.2 million for the same period last year, due primarily to increased revenues from toll systems in India and significant product and weigh station deliveries in Latin America and Asia. For the first nine months of fiscal 2009, offshore sales were $16.0 million, a 62.7% increase over the same period in the prior year. Third quarter 2009 sales in the United States increased to $6.8 million from $4.9 million in the prior year due to higher revenue from maintenance contracts, as well as increased weigh station systems and product sales. For the first nine months of the fiscal year, sales in the U.S. were up 27.3% to $17.3 million. During the first nine months of 2009 the Canadian dollar had weakened against the U.S. dollar by approximately 17% compared to the same period last year, resulting in an increase in the Canadian dollar value of the Company's U.S. dollar denominated sales of approximately $3.7 million. This impact is partially offset by the corresponding higher value of U.S. dollar denominated expenses. In Canada, sales were down marginally to $0.9 million in the quarter compared to $1.1 million last year. For the nine months ended August 31, 2009, Canadian sales remained relatively consistent with the prior year period at $3.0 million.

The Company generated increased sales in the majority of its product lines in the period compared to last year, including weigh station and data collection systems, toll systems and maintenance contracts, and expects to see continued growth through the balance of the year.

"We are very pleased with our operating performance so far this year," commented Randy Hanson, Executive Vice President and COO. "In particular, we are encouraged to see a solid contribution to our earnings and cash flow from our India and recently acquired China operations as both build their businesses in these strong markets."

Gross margin as a percentage of sales was 27.5% in the quarter compared to 29.4% in the prior year. For the first nine months of fiscal 2009 gross margin was 29.1% compared to 29.5% for the same period last year. The decreases are primarily due to the change in value of the U.S. dollar as well as a provision for inventory obsolescence of $200,000 recorded in the third quarter of the current fiscal year.

While administrative and marketing expenses increased in dollar terms compared to last year, as a percentage of sales these costs improved to 19.5% in the third quarter and 20.5% in the first nine months of fiscal 2009 compared to 21.3% and 24.6% respectively in the prior year periods. Research and development costs were 1.3% of sales in the third quarter of fiscal 2009 compared to 2.6% in the prior year, and 1.2% for the first nine months of the year compared to 2.2% for the same period in fiscal 2008. Amortization expense has decreased in fiscal 2009, as did interest expense as the Company benefited from the current lower interest rate environment.

With the higher sales and gross margins, earnings before interest, taxes, depreciation and amortization (EBITDA) increased to $1.0 million in the third quarter of fiscal 2009 compared to $0.8 million in the same prior year period. For the first nine months of the year, EBITDA grew significantly to $2.3 million compared to $0.8 million for the same period in fiscal 2008.

With the higher sales levels, enhanced gross margin, and improved cost structure, the Company generated net earnings of $519,075 or $0.03 per common share in the third quarter of fiscal 2009 compared to $188,277 or $0.01 per share for comparable prior­-year period. For the first nine months of fiscal 2009, net earnings, including foreign exchange losses, were $887,939 or $0.06 per share compared to a net loss of $541,716 or ($0.04) per share for the same nine month period in fiscal 2008.

The Company's balance sheet remained strong as at August 31, 2009. Working capital remained largely unchanged at $4.3 million compared to $4.2 million as at November 30, 2008 while cash flow from operating activities grew to $5.3 million through the first nine months of fiscal 2009 compared to a use of cash of $2.1 million in the same period last year. Capital expenditures for the first nine months of fiscal 2009 were $0.5 million compared to $3.6 million in the prior year which included the investment in Xuzhou-­PAT Control Technologies Limited.

Over the last three years, IRD has leveraged its strong reputation in the North American marketplace to enhance and grow its global presence through wholly and partially owned operations in China, Mexico, India and Chile.

"Our subsidiary in Chile made a strong contribution to our results in the third quarter, and we anticipate continued growth in this region in the quarters ahead," concluded Terry Bergan, President and CEO. "Looking ahead, we continue to benefit from increased investments being made in highway and roadway infrastructure around the world. The Company's backlog of confirmed orders has increased approximately 16% compared to the same time last year, and should result in further growth in sales and profitability through the balance of fiscal 2009 and into 2010."

 Financial Highlights (financial statements are available on the Company's web site www.irdinc.com
     
  Three Months   Nine Months
         
Period Ended August 31,  2009  2008  2009  2008
(in $000's except per share amounts)         
Sales $13,587$10,209$33,224$26,366
EBITDA  1,034  818  2,251  786
Net Earnings (Loss)  519  188  888  (542)
Net Earnings (Loss) per Common Share (basic) $0.03$0.01$0.06 ($ 0.04)
Working Capital     $4,270 4,562
Shareholders' Equity per Share     $1.28$1.21
Common Shares Outstanding      13,998  13,963

As used herein, "EBITDA" means earnings before interest, income taxes, depreciation, and amortization, and includes gains or losses from foreign exchange and earnings or losses from the Company's equity investments. 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 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 earnings: 

 Three Months   Nine Months
     
Period Ended August 31, 2009 2008 2009 2008
(in $000's)     
EBITDA 1,034 818 2,251 786
Amortization expense (265)(271)(773)(821)
Interest expense (163)(243)(563)(742)
Income tax expense (87)(116)(27)235
Net earnings (loss) 519 188 888 (542)

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.

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.

The Company's shares trade on the Toronto Stock Exchange under the 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)
    irdir@irdinc.com
    www.irdinc.com