International Road Dynamics Inc. (IRD), the world’s largest provider of Weigh-In-Motion systems and solutions for the global intelligent transportation systems (ITS) market, today announced strong results for the three months ended February 28, 2009.
Highlights
- 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 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 US 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 in-vehicle 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.
Randy Hanson, executive vice president and COO, said: “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. We expect we will see additional growth going forward as we deliver on our confirmed order backlog and capitalise 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 amortisation (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 higher-margin 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% in the prior year. Interest expense decreased in the period as the Company capitalised 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 prior-year period.
The Company’s balance sheet strengthened as at 28 February 2009. Working capital improved to $4.5 million from $4.2 million as at 30 November 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.
Mel Karakochuk, vice president finance and CFO, added: “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.”
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.
Terry Bergan, president and CEO concluded: “We are confident fiscal 2009 will be a much stronger year for IRD with solid growth and improved financial performance. Our expanding presence in all of our geographic markets, and our proven ability to capitalise on accelerating opportunities in the global intelligent transportation systems business, are now resulting in increased levels of business and a positive long-term outlook.”
Financial Highlights (financial statements are available on the company’s web site)
Three months ended 28 February (in $,000, except per share amounts):
- Sales in 2008: 6,932. Sales in 2009: 11,002.
- EBITIDA in 2008: 71. EBITIDA in 2099: 816
- Net earnings (loss) in 2008: (231). Amortisation expense in 2008: 247
- Net earnings (loss) per common share in 2008: $(0.02). Net earnings (loss) per common share in 2009: $0.02
- Working capital in 2008: 5,140. Working capital in 2009: 4,470
- Shareholders’ Equity per Share in 2008: $1.20. Shareholders’ Equity per Share in 2009: $1.32
- Common shares outstanding in 2008: 13,940. Common shares outstanding in 2009: 13,998.
As used herein, “EBITDA” means earnings before interest, income taxes, depreciation and amortisation, and includes gains or losses from foreign exchange and earnings or losses from the Company’s equity investments. EBITDA is not a recognised 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 28 February (in $,000):
- EBITIDA in 2008: $71. EBITIDA in 2009: $816
- Amortisation expense in 2008: (277). Amortisation expense in 2008: (253)
- Interest expense in 2008: (187). Interest expense in 2009: (217)
- Income tax expense in 2008: (162). Income tax expense in 2009: (99)
- Net earnings (loss) in 2008: $(231). Net earnings (loss) in 2009: $247
IRD is a highway traffic management technology company specialising 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 US 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.
