International Road Dynamics (TSX: 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 and year that ended 30 November 2009.
“2009 was a record year for IRD on a number of fronts. We achieved our highest sales levels ever as a result of our decision seven years ago to leverage our strong reputation and installed base to enter new overseas markets. We also experienced continuing strong demand in our North American markets as our innovative application service provider (ASP) offering gained traction. Most importantly, we generated record earnings for the company, and we expect to build on this progress in 2010 and beyond,” stated Terry Bergan, president and CEO.
The company generated increased sales across the majority of its revenue streams in the 2009 fiscal year. Its recurring service and maintenance revenues grew 8.8% in 2009 and represented 21.4% of total revenues for the year.
Sales for the fourth quarter of the 2009 fiscal year increased 3.9% to $12.8 million compared to $12.3 million for the same period last year. For the year ended 30 November 2009, sales were up 26.7% to a record $49 million compared to $38.7 million last year. The company generated increased sales across the majority of its geographic regions and product lines during the fiscal year.
For the 2009 fiscal year, overseas sales rose 43.2% to $20 million compared to $14 million in the prior fiscal year, due primarily to increased revenues from toll systems in India and significant product and weigh station deliveries in Latin America and Asia. Sales in the US in the fourth quarter of the 2009 fiscal year increased 14.7% to $7.6 million compared to $6.6 million in the prior year’s fourth quarter.
For the fiscal year ending 30 November 2009, sales in the US were up 23.2% to $24.8 million due to higher revenue from maintenance contracts, weigh station systems, data collection systems and product sales. In Canada, sales were down marginally to $1.2 million in the quarter compared to $1.6 million for the same period last year. For the 2009 fiscal year, Canadian sales were $4.2 million compared to $4.6 million in the previous fiscal year.
Gross margin as a percentage of sales improved to 29.6% in the fourth quarter compared to 27.4% in the prior year. For the 2009 fiscal year, gross margin increased to 29.2% compared to 28.8% last year. The increases are primarily due to the higher levels of sales, the impact of a weaker Canadian dollar, as well as a sales mix of higher-margin products.
Administrative and marketing expenses increased in the fourth quarter and year ended 30 November 2009 due primarily to the higher levels of business during the year. However, as a percentage of sales administrative and marketing expenses improved to 20.5% in 2009 compared to 22.6% in the prior year. Research and development costs were 1.1% of sales in the fourth quarter of the 2009 fiscal year compared to 2.2% in the prior year, and 1.2% for the 2009 fiscal year compared to 2.2% in the 2008 fiscal year. Amortization expense decreased in the 2009 fiscal year, while interest expense was also lower as the company capitalized on the current low interest rate environment.
With the higher sales and improved gross margins, earnings before interest, taxes, depreciation and amortization (EBITDA) increased to $1.1 million in the fourth quarter of the 2009 fiscal year compared to $0.6 million in the same prior year period. For the year ending 30 November 2009 EBITDA grew significantly to $3.4 million compared to $1.2 million in the 2008 fiscal year.
Profitability in the 2009 fiscal year was impacted by foreign exchange losses related to the company’s assets and liabilities denominated in foreign currencies. For the year ended 30 November 2009, these foreign exchange losses amounted to approximately $0.8 million compared to a gain of $0.2 million in the prior fiscal year.
With the higher sales levels, enhanced gross margin, and improved cost structure, the company generated net earnings of $377,000 or $0.03 per common share in the fourth quarter of the 2009 fiscal year, compared to break-even performance in the comparable prior-year period. For the 2009 fiscal year, net earnings were $1.3 million or $0.09 per share compared to a net loss of $541,000 or $(0.04) per share in fiscal 2008.
The company’s balance sheet remained strong as at 30 November 2009. Working capital increased to $8.3 million compared to $4.2 million as at 30 November 2008 while cash flow from operating activities grew to $4.1 million in the 2009 fiscal year compared to a use of cash of $2.2 million last year. Capital expenditures in the 2009 fiscal year were $0.6 million compared to $0.4 million in the prior year.
“Looking ahead, we are very excited about our future. With strong and established subsidiaries and partners in major overseas markets, a leading presence in North America, and a state-of-the-art product and service offering, we are well positioned to capitalize on growing demand for solutions that enhance the efficiency and effectiveness of transportation infrastructure around the world,” Mr Bergan concluded.
