International Road Dynamics Inc.
TSX : IRD

International Road Dynamics Inc.

July 14, 2009 07:00 ET

IRD Announces Strong Second Quarter 2009 Results

SASKATOON, SASKATCHEWAN--(Marketwire - July 14, 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 six months ended May 31, 2009.

SECOND QUARTER HIGHLIGHTS:

- Sales up 26% on strong growth in US and Offshore markets

- Operating and overhead costs reduce as percentage of sales

- EBITDA rises to $400,761 compared to loss of $(203,450) last year

- Net earnings of $0.01 per share compared to a loss of $0.03 per share in prior year period

Sales for the second quarter of fiscal 2009 increased 26.1% to $11.6 million compared to $9.2 million for the same period last year. For the first half of fiscal 2009, sales were up 40.1% to $22.6 million compared to $16.2 million for the same period last year. The Company generated increased sales across all of its geographic regions and the majority of its product lines through the first half of the fiscal year.

Offshore sales continued to grow in the quarter, rising 71.4% to $5.9 million compared to $3.4 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 six months of fiscal 2009, offshore sales were $10.2 million, an 82.6% increase over the same period in the prior year. Second quarter 2009 sales in the United States increased to $5.0 million from $4.8 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 half of the fiscal year, sales in the U.S. were up 20.3% to $10.4 million. In Canada, sales were down marginally to $0.8 million in the quarter compared to $1.0 million last year. For the six months ended May 31, 2009, Canadian sales increased to $2.0 million compared to $1.9 million for the same six month period last year, due primarily to Virtual Weigh Station project deliveries during the first quarter of the year as well as slightly higher maintenance revenues.

The Company generated increased sales in the majority of its product lines in the period compared to last year, including commercial vehicle systems, toll systems, maintenance contracts, and product sales, and expects to see continued growth through the balance of the year. The Company's backlog of confirmed orders increased by 27% over the second quarter of 2008, with the majority scheduled for delivery during the current fiscal year.

"We are very pleased with the growth in our offshore business as our subsidiaries in South America and India displayed very strong gains in revenues during the quarter and first half of fiscal 2009," commented Randy Hanson, Executive Vice President and COO. "Looking ahead, we are confident our offshore business will continue to grow as we increase our presence in both current and new markets. Over time we will be transferring certain manufacturing and engineering capabilities to these offshore subsidiaries to capitalize on lower costs and enhanced efficiencies."

Gross margin as a percentage of sales increased to 28.0% in the quarter compared to 27.7% in the prior year. For the first six months of fiscal 2009 gross margin improved to 30.0% compared to 29.5% for the same period last year. The increases are due primarily to the higher sales levels and the weakening of the Canadian dollar against the U.S. dollar.

While administrative and marketing expenses increased in dollar terms compared to last year, as a percentage of sales these costs decreased to 22.0% in the second quarter and 21.2% in the first six months of fiscal 2009 compared to 25.9% and 26.8% respectively in the prior year periods. Research and development costs were 1.1% of sales in the second quarter of fiscal 2009 compared to 2.0% in the prior year, and 1.2% for the first six months of the year compared to 2.0% for the same period in fiscal 2008. Amortization expense decreased in fiscal 2009; interest expense also decreased as the Company capitalized on the current lower interest rate environment.

With the higher sales and improved gross margins, earnings before interest, taxes, depreciation and amortization (EBITDA) increased significantly to $0.4 million in the second quarter of fiscal 2009 compared to a loss of $0.2 million in the same prior year period. For the first half of the year, EBITDA grew to $1.2 million compared to a loss of $0.1 million for the first half of fiscal 2008.

With the higher sales levels, enhanced gross margin, and improved cost structure, the Company generated net earnings, including foreign exchange losses, of $121,639 or $0.01 per common share in the second quarter of fiscal 2009 compared to a net loss of $499,119 or ($0.03) per share for comparable prior-year period. For the first six months of fiscal 2009, net earnings, including foreign exchange losses, were $368,864 or $0.03 per share compared to a net loss of $729,993 or ($0.05) per share for the same six month period in fiscal 2008.

"Our profitability in fiscal 2009 has been impacted by the significant increase in noncash mark-to-market foreign exchange losses related to our assets, liabilities, revenues and expenses denominated in foreign currencies. With the substantial growth we are experiencing in our offshore businesses, we will be examining strategies to mitigate these factors in the quarters ahead," stated Mel Karakochuk, Vice President Finance and CFO.

The Company's balance sheet remained strong as at May 31, 2009. Working capital remained largely unchanged at $4.1 million compared to $4.2 million as at November 30, 2008 while cash flow from operating activities grew to $3.7 million through the first six months of fiscal 2009 compared to a use of cash of $0.7 million in the same period last year. Capital expenditures for the first six months of fiscal 2009 were $0.2 million compared to $0.3 million in the prior year.

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.

"Following a very strong start to the new year, we were pleased to have generated such strong growth in both revenues and net earnings in the second quarter of fiscal 2009," concluded Terry Bergan, President and CEO. "Over the long term, we expect our performance will continue to improve as our continuing efforts to enhance operating efficiencies and reduce costs, combined with our strong reputation in domestic North American markets and our growing presence in offshore regions where enhanced transportation infrastructure remains a priority, result in higher sales and increased profitability."



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

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Three Months Six Months
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Period Ended May 31, 2009 2008 2009 2008
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(in $000's except per share amounts)
Sales $ 11,635 $9,226 $22,637 $16,158
EBITDA 401 (203) 1,217 (132)
Foreign Exchange Loss (426) (56) (638) (114)
Net Earnings (Loss) 122 (499) 369 (730)
Net Earnings (Loss) per Common
Share (basic) $ 0.01 ($ 0.03) $ 0.03 ($ 0.05)
Working Capital $ 4,070 4,476
Shareholders' Equity per Share $ 1.26 $ 1.17
Common Shares Outstanding 13,998 13,950
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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:



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Three Months Six Months
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Period Ended May 31, 2009 2008 2009 2008
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(in $000's)
EBITDA 401 (203) 1,217 (132)
Amortization expense (255) (274) (508) (550)
Interest expense (183) (211) (400) (399)
Income tax expense 159 189 60 351
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Net earnings (loss) 122 (499) 369 (730)
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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.

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)
    Email: irdir@irdinc.com
    Website: www.irdinc.com