International Road Dynamics Inc.

International Road Dynamics Inc.

May 07, 2009 12:42 ET

IRD Announces Strong First Quarter 2009 Results

SASKATOON, SASKATCHEWAN--(Marketwire - May 7, 2009) - International Road Dynamics Inc. (IRD) (TSX:IRD), the world's largest provider of WeighInMotion systems and solutions for the global Intelligent Transportation Systems (ITS) market, today announced strong results for the three months ended February 28, 2009.


- Sales up 59% on gains across all geographic markets

- Gross margin improves, operating costs reduce as percentage of sales

- Net earnings of $0.02 per share compared to a loss of $(0.02) per share in prior year period

Sales for the first quarter of fiscal 2009 increased 58.7% to $11.0 million compared to $6.9 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 in the quarter.

Offshore sales continued to grow in the quarter, rising to $4.3 million compared to $2.2 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. First quarter 2009 sales in the United States also increased to $5.4 million from $3.8 million in the prior year due to higher maintenance contracts, as well as increased weigh station systems and product sales. In Canada, sales rose to $1.2 million in the quarter compared to $0.9 million last year due to significant weigh station deliveries and higher maintenance and fleet management contracts.

The Company generated increased sales in the majority of its product lines in the period compared to last year, including weigh station systems, toll systems, maintenance contracts, product sales and invehicle systems, and expects to see continued growth through the balance of the year. The Company's backlog of confirmed orders has seen a healthy 53% increase compared to last year's first quarter, with the majority scheduled for delivery during the current fiscal year.

"We are pleased with our growth and strong operating performance in the quarter as we built on the solid momentum generated through the last months of fiscal 2008," commented Randy Hanson, Executive Vice President and COO. "We expect we will see additional growth going forward as we deliver on our confirmed order backlog and capitalize on our increased presence in international markets and our proven reputation for quality and customer service in North America."

Earnings before interest, taxes, depreciation and amortization (EBITDA) were $0.8 million in the first quarter of fiscal 2009 compared to $0.01 million in the same prior year period. Gross margin for the quarter improved to 32.2% of sales from 31.9% in the prior year period, due primarily to the higher sales levels, increased operating efficiencies, increased highermargin maintenance and product sales, and the weaker Canadian dollar. While administrative and marketing expenses increased in dollar terms compared to last year, as a percentage of sales these costs decreased to 20.3% in the first quarter of fiscal 2009 from 27.9% in the prior year period. Research and development costs also decreased to 1.3% as a percentage of sales in the first quarter of fiscal 2009 compared to 2.0% in the prior year. Interest expense decreased in the period as the Company capitalized on the current lower interest rate environment.

With the higher sales levels, enhanced gross margin, and improved cost structure, the Company generated net earnings of $247,000 or $0.02 per common share in the first quarter of fiscal 2009 compared to a net loss of ($231,000) or ($0.02) per share for comparable prioryear period.

The Company's balance sheet strengthened as at February 28, 2009. Working capital improved to $4.5 million from $4.2 million as at November 30, 2008 while cash flow from operations rose to $954,000 in the quarter compared to a use of cash in operations of $120,000 in the first quarter of the prior year. Capital expenditures decreased to $199,000 in the quarter compared to $276,000 in the prior year. The Company was in compliance with its revised credit covenants at quarter end.

"We were pleased to have revised the covenants related to our credit lines during the quarter, providing us with the financial resources and flexibility to act on growth opportunities going forward," added Mel Karakochuk, Vice President Finance and CFO.

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, Brazil, Mexico, Nigeria, India and Chile.

"We are confident fiscal 2009 will be a much stronger year for IRD with solid growth and improved financial performance," concluded Terry Bergan, President and CEO. "Our expanding presence in all of our geographic markets, and our proven ability to capitalize on accelerating opportunities in the global Intelligent Transportation Systems business, are now resulting in increased levels of business and a positive longterm outlook."

Financial Highlights (financial statements are available on the Company's
web site)

Three Months Ended February 28,
2009 2008
(in $,000 except per share amounts)
Sales 11,002 6,932
EBITDA 816 71
Net Earnings (Loss) 247 (231)
Net Earnings (Loss) per Common Share (basic) $ 0.02 $ (0.02)
Working Capital 4,470 5,140
Shareholders' Equity per Share $ 1.32 $ 1.20
Common Shares Outstanding 13,998 13,940

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 Ended February 28,
2009 2008
(in $,000)
EBITDA $ 816 $ 71
Amortization expense (253) (277)
Interest expense (217) (187)
Income tax expense (99) 162
Net earnings (loss) $ 247 $ (231)

Certain statements in this discussion may include "forwardlooking" 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 forwardlooking 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 forwardlooking statements. Given these risks and uncertainties, investors should not place undue reliance on forwardlooking 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
    International Road Dynamics Inc.
    Francine Senecal-Lepage
    Investor Relations
    (306) 653-6603
    (306) 653-6609 (FAX)