International Road Dynamics Inc.
TSX : IRD

International Road Dynamics Inc.

July 14, 2010 13:30 ET

IRD Announces Solid Results in Second Quarter of Fiscal 2010

SASKATOON, SASKATCHEWAN--(Marketwire - July 14, 2010) - International Road Dynamics Inc. (TSX:IRD), the world's largest provider of Weigh-In-Motion systems and solutions for the global Intelligent Transportation Systems (ITS) market, today announced results for the three and six months ended May 31, 2010.

Q2 2010 HIGHLIGHTS:

  • Commercial vehicle systems sales rise 43.4%
  • Data collection revenues increase 18%
  • Canadian sales more than triple
  • Stable growth in U.S. sales impacted by stronger Canadian dollar
  • Gross margin strengthens to 28.7%
  • Revenues significantly improve over Q1 2010
  • Expectations for solid growth through balance of year

Sales for the second quarter of fiscal 2010 were $11.9 million compared to $11.6 million for the same period last year. The increase was primarily due to higher sales of commercial vehicle systems in Canada compared to the same quarter last year. For the first half of fiscal 2010, sales were $20.4 million compared to $22.6 million for the same six month period last year. The decline was primarily due to a slow start to the year and the Canadian dollar strengthening against the US dollar which resulted in a decrease in the Canadian dollar value of the Company's U.S. dollar-denominated sales of approximately $2.2 million through the first six months of fiscal 2010. Compared to the first quarter of fiscal 2010, total sales in the second quarter rose 39.6%.

Offshore sales in the second quarter and first half of fiscal 2010 were $4.2 million and $7.4 million respectively, compared to $5.9 million and $10.2 million for the same respective periods last year. The decreases were primarily due to higher than normal revenues from toll systems in India and significant product and weigh station deliveries in Latin America and Asia in the prior year periods as well as the impact of a stronger Canadian dollar. Management expects offshore revenues to increase from the current level during the remainder of fiscal 2010. Sales in the United States in the second quarter of fiscal 2010 were $5.1 million compared to $5.0 million in the prior year's second quarter. For the first half of fiscal 2010, sales in the U.S. were $9.1 million compared to $10.4 million for the same period last year. The decline was primarily due to the stronger Canadian dollar. Management expects revenues from the U.S. market to increase through the remainder of the current fiscal year. In Canada, sales improved significantly to $2.5 million in the quarter compared to $0.8 million for the same period last year, and nearly doubled to $4.0 million compared to $2.0 million for the first half of fiscal 2010 compared to the same period last year. The significant increase in Canadian sales was primarily due to higher commercial vehicle system project deliveries. Management expects sales in Canada for the final two quarters of fiscal 2010 will be more in-line with the first quarter of the current year.

"We were very pleased to see our results bounce back after a slow start to 2010," stated Terry Bergan, President and CEO. "For the remainder of the year, we expect to see a solid increase in sales of our in-vehicle and toll systems given the current level of in house orders and planned deliveries for the latter half of 2010."

Gross margin as a percentage of sales was 28.7% in the second quarter compared to 28.0% in the prior year. The slight improvement in gross margin in the quarter was due to a sales mix that included an increase in the proportion of higher margin products and higher revenues available to cover fixed costs of operations. For the six months ended May 31, 2010, gross margin was lower at 28.5% compared to 30.0% for the same period last year due primarily to the lower revenues resulting from the stronger Canadian dollar.

Administrative and marketing expenses in the second quarter and first half of fiscal 2010 were largely consistent with the prior year at $2.6 million and $4.7 million, respectively. As a percentage of sales, administrative and marketing expenses were 21.9%, in the second quarter of fiscal 2010, consistent with 22.0% in the prior year. For the first half of the current fiscal year, administrative and marketing expenses as a percentage of sales rose slightly to 23.1% compared to 21.2% for the same period last year, due primarily to the reduced sales in the current year period resulting from the stronger Canadian dollar. Research and development costs were 1.0% of sales in the second quarter and 1.1% of sales for the first half of fiscal 2010, consistent with the comparable prior year periods. Interest expense was lower in the second quarter and first half of fiscal 2010 due to a reduced level of debt as well as the Company benefiting from the current low interest rate environment.

Earnings before interest, taxes, depreciation and amortization (EBITDA) were $0.7 million in the second quarter of fiscal 2010 compared to $0.4 million in the same prior year period. For the six months ended May 31, 2010, EBITDA was $0.8 million compared to $1.2 million for the same period last year. Net earnings were $0.3 million or $0.02 per common share in the second quarter of fiscal 2010 compared to net earnings of $0.1 million or $0.01 per share for the same period last year. For the six months ended May 31, 2010, net earnings were $0.1 million or $0.01 per common share compared to $0.4 million or $0.03 per common share in the comparable prior year period.

The Company's balance sheet remained strong as at May 31, 2010 with working capital at $7.8 million compared to $8.2 million as at November 30, 2009. As at May 31, 2010 the Company was in compliance with all bank covenants and expects to remain in compliance for the remainder of the year.

During the first six months of 2010 the Company expanded its backlog of confirmed orders with new contracts in Hawaii, New Brunswick, Alaska, Washington, and California valued at approximately CDN $7.3 million, as well as a new three-year service and maintenance award in Hawaii valued at approximately CDN $1.2 million.

"We generated solid performance in our US and Canadian business through the first half of the year, and expect to match this growth in our overseas markets during the balance of fiscal 2010. We also strengthened our recurring service and maintenance business, high quality revenues that provide stable and consistent cash flows over the long term," 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,   2010   2009   2010   2009
(in 000's except per share amounts)                
Sales $ 11,912 $ 11,635 $ 20,446 $ 22,637
EBITDA $ 703 $ 401 $ 839 $ 1,217
Net Earnings $ 258 $ 122 $ 77 $ 369
Net Earnings per Common Share (Basic) $ 0.02 $ 0.01 $ 0.01 $ 0.03
Total Assets $ 40,482 $ 40,065 $ 40,482 $ 40,065
Total Long-Term Financial Liabilities $ 6,833 $ 8,304 $ 6,833 $ 8,304
Working Capital         $ 7,787 $ 4,070
Shareholders' Equity per Share         $ 1.30   1.26
Common Shares Outstanding           13,998   13,998

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 Six Months
Period Ended May 31,   2010     2009     2010     2009  
(in $000's)                        
EBITDA $ 703   $ 401   $ 839   $ 1,217  
Amortization Expense   (236 )   (255 )   (436 )   (508 )
Interest Expense   (162 )   (183 )   (335 )   (400 )
Income Tax Expense   (47 )   159     9     60  
Net Earnings $ 258   $ 122   $ 77   $ 369  

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 future operating results and economic performance of the Company, 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 extensive 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.

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)
    irdir@irdinc.com
    www.irdinc.com