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 and nine months ended 31 August 2009.
Third quarter highlights
- Record quarterly sales, up 33% on strong growth in US and offshore markets
- Offshore sales grow 37% on strength in Asia and Latin America
- Operating and overhead costs reduce as percentage of sales
- EBITDA increases 26% on strong revenue growth
- Net earnings of $0.03 per share compared with $0.01 per share last year
Sales for the third quarter of fiscal 2009 increased 33.1% to $13.6m compared with $10.2m for the same period last year. For the first nine months of fiscal 2009, sales were up 37.4% to $36.2m compared with $26.4m for the same period last year.
The company generated increased sales across the majority of its geographic regions and product lines through the first nine months of the fiscal year.
Offshore sales continued to grow in the quarter, rising 36.6% to $5.8m compared with $4.2m 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 and Asia.
For the first nine months of fiscal 2009 offshore sales were $16m, a 62.7% increase over the same period in the prior year. Third quarter 2009 sales in the US increased to $6.8m from $4.9m in the prior year due to higher revenue from maintenance contracts, as well as increased weigh station systems and product sales.
For the first nine months of the fiscal year, sales in the US were up 27.3% to $17.3m. During the first nine months of 2009 the Canadian dollar had weakened against the US dollar by approximately 17% compared with the same period last year, resulting in an increase in the Canadian dollar value of the company’s US dollar denominated sales of approximately $3.7m. This impact was partially offset by the corresponding higher value of US dollar denominated expenses.
In Canada, sales were down marginally to $0.9m in the quarter compared with $1.1m last year. For the nine months ended 31 August 2009, Canadian sales remained relatively consistent with the prior year period at $3m.
The company generated increased sales in the majority of its product lines in the period compared with last year, including weigh station and data collection systems, toll systems and maintenance contracts, and expects to see continued growth through the balance of the year.
“We are very pleased with our operating performance so far this year,” said Randy Hanson, executive vice president and COO. “In particular, we are encouraged to see a solid contribution to our earnings and cash flow from our India and recently acquired China operations as both build their businesses in these strong markets.”
Gross margin as a percentage of sales was 27.5% in the quarter compared with 29.4% in the prior year. For the first nine months of fiscal 2009 gross margin was 29.1% compared with 29.5% for the same period last year. The decreases are primarily due to the change in value of the US dollar as well as a provision for inventory obsolescence of $200,000 recorded in the third quarter of the current fiscal year.
While administrative and marketing expenses increased in dollar terms compared with last year, as a percentage of sales these costs improved to 19.5% in the third quarter and 20.5% in the first nine months of fiscal 2009 compared with 21.3% and 24.6% respectively in the prior year periods.
Research and development costs were 1.3% of sales in the third quarter of fiscal 2009 compared with 2.6% in the prior year, and 1.2% for the first nine months of the year compared with 2.2% for the same period in fiscal 2008. Amortisation expense has decreased in fiscal 2009, as has interest expense as the company benefited from the current lower interest rate environment.
With the higher sales and gross margins, earnings before interest, taxes, depreciation and amortisation (EBITDA) increased to $1m in the third quarter of fiscal 2009 compared with $0.8m in the same prior year period. For the first nine months of the year, EBITDA grew significantly to $2.3m compared with $0.8m for the same period in fiscal 2008.
With the higher sales levels, enhanced gross margin, and improved cost structure, the company generated net earnings of $519,075 or $0.03 per common share in the third quarter of fiscal 2009 compared with $188,277 or $0.01 per share for comparable prior-year period.
For the first nine months of fiscal 2009 net earnings, including foreign exchange losses, were $887,939 or $0.06 per share compared with a net loss of $541,716 or ($0.04) per share for the same nine month period in fiscal 2008.
The company’s balance sheet remained strong as at 31 August 2009. Working capital remained largely unchanged at $4.3m compared with $4.2m as at 30 November 2008, while cash flow from operating activities grew to $5.3m through the first nine months of fiscal 2009 compared with a use of cash of $2.1m in the same period last year.
Capital expenditures for the first nine months of fiscal 2009 were $0.5m compared with $3.6m in the prior year, which included the investment in Xuzhou-PAT Control Technologies Limited.
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, Mexico, India and Chile.
“Our subsidiary in Chile made a strong contribution to our results in the third quarter, and we anticipate continued growth in this region in the quarters ahead,” said Terry Bergan, president and CEO.
“Looking ahead, we continue to benefit from increased investments being made in highway and roadway infrastructure around the world. The company’s backlog of confirmed orders has increased approximately 16% compared with the same time last year, and should result in further growth in sales and profitability through the balance of fiscal 2009 and into 2010.”