International Road Dynamics Inc.
TSX : IRD

International Road Dynamics Inc.

July 10, 2008 16:00 ET

IRD Announces Second Quarter 2008 Results

SASKATOON, SASKATCHEWAN--(Marketwire - July 10, 2008) - 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 its results for the three and six months ended May 31, 2008.

Sales for the second quarter of fiscal 2008 were $9.2 million compared to $11.1 million for the same period last year. For the first six months of fiscal 2008, sales were $16.2 million compared to $19.4 million for the same period in fiscal 2007.

International sales in the second quarter and first six months of fiscal 2008 were $3.4 million and $5.6 million respectively, compared to $2.6 million and $6.0 million for the same respective periods last year. Management believes that recent new contract awards offshore will result in a solid increase in international sales for the full fiscal 2008 year compared to the prior year.

United States sales in the second quarter of fiscal 2008 declined to $4.8 million from $6.7 million in the prior year period due primarily to delays in the awarding of new systems contracts. For the six months ended May 31, 2008, sales in the US were $8.7 million compared to $10.2 million for the same period last year.

Canadian sales in the second quarter of fiscal 2008 were $1.0 million compared to $1.8 million in the prior year. For the six months ended May 31, 2008, sales in Canada were $1.9 million compared to $3.2 million for the same period last year. The decrease is due primarily to the delivery and installation of two large data collection and truck pre-clearance site contracts completed in the first half of fiscal 2007. There were no similar contracts during the first half of fiscal 2008.

With the slowdown in the US economy, the Company is experiencing delays in the awarding of federally funded contracts for weigh station and data collection systems. In response, the Company has increased its sales efforts in city, municipal and private sectors and accelerated its efforts in specific international markets with higher growth potential, including India, China and Brazil. The Company is also continuing its strategy of transferring as many costs as possible to regional jurisdictions in order to increase cost competitiveness and reduce exposure to currency fluctuations. Through the first six months of fiscal 2008 new contract awards to the Company's subsidiaries in India and Chile have exceeded forecasts, with the resulting revenues to be realized in the second half of fiscal 2008 and into early fiscal 2009. In addition, management believes the acquisition of Xuzhou-PAT Control Technologies in China in the first quarter of 2008 will generate increased sales volumes through the balance of the year and over the longer term.

"Our acquisitions in targeted high-growth international markets, and subsequent investments in marketing, manufacturing and engineering, are beginning to generate significant benefits for IRD. We are winning more offshore contracts, and our presence as one of the world's leading Intelligent Transportation Systems providers is resulting in solid opportunities for continued growth in these regions," commented Terry Bergan, President and CEO. "And while our US markets may be facing certain challenges over the near term, we remain the supplier of choice in most regions and we are continuing to successfully build our service and maintenance business and grow our distribution network, both key components of our strategic plan."

The Company expects maintenance contract revenues will increase slightly for the full fiscal year ended November 30, 2008 compared to the prior year, and that these stable and recurring revenues will provide a significant portion of the Company's total revenues going forward. They include additional value-added data services, consistent with the Company's strategy to become an Application Services Provider (ASP) for data collection, in-vehicle driver management-GPS systems and service contracts.

Net operating earnings (before interest, amortization, foreign exchange adjustments, earnings (loss) from equity investments, other income and taxes) were $419,135 in the second quarter of fiscal 2008 compared to approximately $1.1 million for the same period last year. For the first half of fiscal 2008, net operating earnings were $556,668 million compared to approximately $1.8 million for the same period in fiscal 2007. Gross margin as a percentage of sales increased marginally in the second quarter, while remaining stable through the first six months of fiscal 2008 compared to the prior year period.

Administrative and marketing expenses in fiscal 2008 have risen compared with the prior year due primarily to increased sales and marketing efforts, while research and development costs increased slightly as the Company expands its product lines and enhances its current product offerings. Amortization expense increased primarily due to the commencing of the amortization of the Company's new manufacturing facility completed in the fourth quarter of fiscal 2007.

The Company generated a net loss of $(0.2) million or $(0.01) per common share for the three months ended May 31, 2008 compared to net earnings of $0.7 million or $0.05 per common share for the same period last year. For the six months ended May 31, 2008, the Company generated a net loss of $(0.3) million or $(0.02) per common share compared to net earnings of $1.1 million or $0.08 per common share for the first six months of the prior year.

Working capital at the end of the second quarter of 2008 was $4.9 compared to $9.3 at the end of February 2008. The change is primarily the result of an increase in the current portion of long-term debt to $5.1 million at May 31, 2008 due to the inclusion as current portion of long-term debt of a $4.0 million non-revolving term facility used to acquire Xuzhou-PAT Control Technologies during the quarter. The Company anticipates this loan will be converted to a fixed-term loan in December 2008.

"Looking ahead, we remain very confident in the long-term prospects for IRD. We continue to build our presence in targeted, high-growth international markets, and remain one of the largest suppliers of ITS solutions worldwide. Our service and maintenance business will expand, and our focused R&D programs are enhancing our ability to cost effectively meet the needs of our customers. Importantly, our backlog of confirmed orders worldwide as at May 31, 2008 is up more than 16% from the same time last year, and we expect to build on this book of orders through the balance of the year," Mr. Bergan concluded.

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



----------------------------------------------------------------------------
----------------------------------------------------------------------------

Three Months Six Months
----------------------------------------------------------------------------
Period Ended May 31, 2008 2007 2008 2007
----------------------------------------------------------------------------
(in $000's except per share amounts)
Sales 9,226 11,124 16,158 19,420
EBITDA 293 1,292 457 2,157
Net Earnings (173) 714 (330) 1,101
Net Earnings per Common Share (basic) $(0.01) $ 0.05 $ (0.02) $ 0.08
Working Capital 4,911 9,265
Shareholders' Equity per Share $ 1.18 $ 1.20
Common Shares Outstanding 13,950 13,930
----------------------------------------------------------------------------
----------------------------------------------------------------------------


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 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 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 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.

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