International Road Dynamics (IRD), the world’s largest provider of Weigh-In-Motion systems and solutions for the global Intelligent Transportation Systems (ITS) market, today announced its results for the three months ended February 29, 2008.
Sales for the first quarter of fiscal 2008 ended February 29, 2008 were US$6.9 million compared to US$8.3 million for the same period last year.
Revenues in the United States rose 10.4% to US$3.8 million from US$3.5 million in the prior year period due primarily to increased revenue from in-vehicle driver management-GPS systems and the continuation of an 8 year contract to provide transponder administration services for the North Carolina Department of Transportation which started operation in the third quarter of fiscal 2007.
Overseas sales in the first quarter of fiscal 2008 were US$2.2 million compared to US$3.4 million last year due to decreased sales volumes in China, India and Chile. Management believes that recent new contract awards in India and Chile, as well as its recent acquisition of Xuzhou-PAT Control Technologies Limited in China in the first quarter of 2008, will generate increased sales volumes in the Company’s overseas markets through the balance of the year and going forward.
Canadian sales were US$0.9 million in the first quarter of 2008 compared to US$1.4 million in the prior year. The decrease is due primarily to the delivery and installation of two large data collection and truck pre-clearance site contracts completed in the first quarter of fiscal 2007.
“We are excited about the new orders recently received and the momentum in our off-shore markets. Our results in the first quarter were impacted by cyclical nature of our business hoHHhowever, we remain optimistic that the increased level of orders recently received will generate improved results in the latter part of fiscal 2008 and going forward,” commented Terry Bergan, President and CEO.
The Company’s service and maintenance contract revenues remained strong in the first quarter of fiscal 2008. This base of recurring revenue is expected to provide a significant portion of the Company’s total revenues going forward. Recent awards and renewals include additional value added data services consistent with the Company’s strategy to become an Application Services Provider (ASP) for data collection, in-vehicle driver management-GPS systems and other service contracts.
Earnings before interest, taxes, depreciation and amortization (EBITDA) were $0.2 million in the first quarter compared to $0.9 million for the same period last year. Gross margins as a percentage of sales were marginally lower in the first quarter compared to the prior year period due to the negative impact resulting from the decline in the value of the US dollar and a sales mix in the period that included a smaller proportion of higher margin IRD products than the prior year.
Administrative and marketing expenses in the quarter were relatively flat compared with the prior year. Research and development costs were maintained at the same level as the previous year as the Company continues an active program of technology development aimed primarily at adding to the functionality of products developed over the past few years.
Amortization expense increased primarily due to the commencing of the amortization of the Company’s new manufacturing facility completed in the fourth quarter of fiscal 2007 and the amortization of equipment costs for the North Carolina transponder project beginning in the third quarter of fiscal 2007.
The Company generated a net loss of $0.2 million or $0.01 per common share for the three months ended February 29, 2008 compared to net earnings of US$0.4 million or $0.03 per common share for the same period last year.
Working capital at the end of the first quarter of 2008 was US$5.1 million compared to $9.3 million at the end of November 2007. The change is primarily the result of an increase in the current portion of long-term debt to US$5.1 million at February 29, 2008.
This increase is due to the inclusion as current portion of long-term debt of a $3.5 million non-revolving loan facility and $.75 million of vendor loans used to acquire Xuzhou-PAT Control Technologies Limited during the quarter. The Company anticipates that US$4 million of these loans will be converted to a fixed-term loan in December 2008 under the $4 million loan facility currently in place.
“During and subsequent to the quarter we were awarded new toll contracts in India, a US$3.7 million order to supply and install border security devices in Mexico through our Chilean subsidiary, and a number of other orders for our off-the-shelf product in China. We are confident that revenues from these contracts and additional new business, combined with continued solid demand for our weigh station, data collection and IVS systems technologies, will generate enhanced growth and profitability going forward,” Mr Bergan concluded.