SASKATOON, SASKATCHEWAN--(Marketwire - Feb. 28, 2013) -
International Road Dynamics Inc. (TSX:IRD), one of the world's leading providers of systems and solutions for the global Intelligent Transportation Systems (ITS) market, today announced improved results for the fourth quarter and year ended November 30, 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 Consolidated Financial Statements for the period for a comprehensive description of the changes arising from the transition.
- Company maintains strong financial position with positive working capital position of $7.0 million
- Revenues up 6.3% for the fiscal year on solid growth across majority of product lines and most geographic regions.
- Gross margins improve significantly on enhanced product mix and increased profitability on international product sales
- EBITDA positive of $0.7 million in fiscal 2012 compared to negative of $2.0 million last year
- Equity investment in China makes solid contribution to earnings
- Subsidiary in Chile increased profitable earnings on expanding South America operations. Company also signed significant new order for a major contract in Paraguay for delivery in 2013
- Subsidiary in India showing improvement in operating results
"Fiscal 2012 was a much better year as our revenues increased and overall performance improved," commented Terry Bergan, President and CEO. "Over the longer term, we are confident the fundamentals in our markets will continue to remain positive and, with a strengthening global economy, we expect governments around the world will accelerate investment in their highway and roadway infrastructure while private sector transportation and other companies will increasingly adopt ITS solutions to enhance their operational efficiency."
Revenues for the fourth quarter and year ended November 30, 2012 rose 17.3% and 6.3% respectively compared to the comparable periods in the prior year due to improvement across the majority of the Company's product lines and geographic regions.
Revenues in the United States in fiscal 2012 rose 16.9% to $24.4 million from $20.9 million last year due in part to improved business fundamentals in the U.S. market arising from a recently-approved funding bill passed by the U.S. Congress. Revenues in Canada for the year ended November 30, 2012 declined to $3.1 million from $3.7 million in the prior year primarily due to a reduction in product deliveries this year. Offshore sales revenues in fiscal 2012 were $14.0 million compared to $14.6 million in fiscal 2011. Revenues increased in both the Company's Chilean and Indian subsidiaries; however the gains were offset by lower product sales across other international markets.
For the year ended November 30, 2012 the Company reported share of earnings from its 50% equity investment in XPCT in China of $378,507 as XPCT recorded positive gains on the completion of a significant traffic systems project plus continued and growing profits in its wire harness business compared to earnings of $37,688 in fiscal 2011.
"The new funding bill approved by the U.S. Congress in June 2012 should generate further growth in our U.S. markets at least over the next two years, while our South American subsidiary in Chile continues to develop new business opportunities throughout Latin America. We are also pleased to have generated positive equity earnings with our investment in China," commented Randy Hanson, Executive Vice President and COO. "We are encouraged by the improvement in our Indian subsidiary following challenging years in 2010 and 2011, and expect this positive momentum will continue going forward."
Gross margin as a percentage of revenues improved significantly to 28.0% in the fourth quarter of fiscal 2012 from 24.4% in the same prior-year period, and to 29.5% for the year ended November 30, 2012 compared to 23.1% in fiscal 2011. The increase was due primarily to product mix changes in fiscal 2012 as higher-margin maintenance contract revenues and product sales represented a greater portion of total revenues, in addition to improved profitability on international projects.
Administrative and marketing expenses increased in fiscal 2012 compared to the prior year due primarily to increases in professional and advisory fees, premises costs, and selling expenses in international operations. Net research and development costs increased in fiscal 2012 as the Company maintained total spending at 3% of revenues, consistent with the prior year. The Company continues its active program of technology development.
Financing costs declined in fiscal 2012 compared to the prior year period due primarily to reduced long-term debt resulting from the sale of the Company's head office in the prior year and reduced bad debt expenses. These reductions were partially offset by higher short term interest costs due to higher rates on its line of credit.
The Company returned to positive earnings before interest, taxes, depreciation and amortization (EBITDA) in fiscal 2012 of $0.7 million compared to a negative EBITDA of $(2.0) million in fiscal 2011. The increase in EBITDA is primarily due to the higher gross margin in the current year, partially offset by the losses incurred at the Company's subsidiary in India. Fourth quarter 2012 EBITDA was negative $(0.3) million, a significant improvement from the negative EBITDA of $(1.1) million in the same quarter last year.
The Company generated a net loss of $(0.7) million or $(0.05) per common share in the fourth quarter of fiscal 2012 compared to a net loss of $(2.1) million or $(0.15) per common share for the same period last year. For fiscal 2012 the Company suffered a net loss of $(0.6) million or $(0.05) per common share compared to a net loss of $(3.5) million or $(0.25) per common share last year. The net loss is primarily related to losses in its Indian subsidiary which, although much improved from the prior year, continued to experience difficulties in completion of certain projects and account collection issues carried over from prior years. All other operating units reported profitable results.
The Company's balance sheet remained solid at November 30, 2012 with working capital of $7.0 million compared to $7.4 million at the same time last year. The Company's current ratio remained strong at 1.45 times. Cash flow from operating activities, after changes in other operating items, rose significantly to $1.7 million in fiscal 2012 compared to a use of cash of $1.4 million in the prior year due primarily to the improved gross margin during the year.
Financial Highlights (financial statements are available at www.irdinc.com)
| ||Three Months|| ||Twelve Months|| |
| || |
|Period ended November 30,||2012|| ||2011|| ||2012|| ||2011|| |
| || |
|(in $000's except per share amounts)||$|| ||$|| ||$|| ||$|| |
| || |
|Revenue||10,962|| ||9,346|| ||41,577|| ||39,099|| |
|Net loss per common share (Basic & Diluted)||(0.05||)||(0.15||)||(0.05||)||(0.25||)|
|Total Assets|| || || || ||32,565|| ||32,720|| |
|Total Long-Term Financial Liabilities|| || || || ||-|| ||1,082|| |
|Working Capital|| || || || ||7,003|| ||7,430|| |
|Shareholders' Equity per Share|| || || || ||1.18|| ||1.23|| |
|Common Shares Outstanding|| || || || ||13,998|| ||13,998|| |
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 the Company's future operating results and economic performance, 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.
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 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.
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. 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