International Road Dynamics Inc. (TSX: IRD), one of the world’s leading providers of systems and solutions for the global Intelligent Transportation Systems (ITS) industry, today announced its results for the three months ended February 28, 2013.
Highlights:
- Trend of improved year-over-year quarterly financial performance continues
- Solid increase in gross margin percentages on product mix and increased performance on international sales
- Service revenues continue to provide consistent contribution to earnings
- XPCT investment pays dividend of $491,601
- Subsidiary in India maintains trend of improved operating results
- Subsidiary in Chile provides strong market position and continued growth in Latin America
- Strong financial position maintained with positive working capital of $7.5 million
"While we were pleased that the trend in improved year-over-year profitability continued in the quarter, our revenues were impacted by delays in certain key projects that we had expected to include in our first quarter results," commented Terry Bergan, President and CEO.
"Looking ahead, these contracts will make a positive contribution in the coming quarters, augmented by our solid and growing order backlog and the continuing long-term opportunities in our markets."
Revenues for the first quarter of fiscal 2013 were $7.8 million compared to $8.9 million for the same period last year.
Revenues in the Company’s Canadian and United States markets declined due to a delay in expected awards of new projects. Management continues to believe that its North American business will grow over the near term due to a recently-approved funding bill passed by the U.S. Congress.
Latin American revenues, originating from the Company’s successful subsidiary in Chile, increased by 49% in the quarter compared to last year despite a delay in a major project in Paraguay.
South Asian revenues were down in the quarter compared to last year as several highway and toll systems projects were being completed and not yet replaced by new projects.
Other International revenues, which include all other overseas sales originating from North America, fell in the quarter primarily due to a decline in product sales resulting from delay in orders primarily in the Company’s Chinese market.
For the three months ended February 28, 2013 the Company reported an improved equity share loss from its 50% equity investment in XPCT in China of $3,899 compared to a loss of $73,446 in the same prior year period as XPCT recorded positive gains in its wiring harness business. The Company received dividends of $491,601 from XPCT during the period.
Gross margin as a percentage of revenues improved significantly to 32.8% in the first quarter of fiscal 2013 from 26.5% in the same prior year period due primarily to increased revenues from higher margin service revenues and product sales this year, as well as improved performance on international projects, particularly at the Company’s subsidiary in India.
Administrative and marketing expenses increased compared to the prior year due primarily to higher selling costs in its Latin America operations resulting in the higher sales revenues. Net research and development costs increased due to accelerated technology development programs aimed at adding to the functionality of its products. Interest costs were higher due to increased interest rates on the Company’s credit lines.
The Company continued to demonstrate a trend of improved year-over-year quarterly performance as earnings before interest, taxes, depreciation and amortization ("EBITDA") reduced to a negative $190,359 in the first quarter of 2013 compared to a negative $322,506 in the same prior year period. The Company generated a net loss of $383,000 ($0.03 per share) compared to a loss of $512,919 ($0.04 per share) last year.
The Company’s balance sheet remained solid at February 28, 2013 with working capital of $7.5 million. Cash flow from operating activities, after changes in non-cash working capital items, rose to $1.7 million for the three months ended February 28, 2013 compared to $55,591 in the prior year period due primarily to higher deferred revenue balances resulting from customer advances received in the Company’s Latin American operations. The Company’s current ratio remained strong at 1.51 times with a solid debt to equity ratio of 93%.
