FOR IMMEDIATE RELEASE:
RUGGEDCOM REPORTS 26% REVENUE GROWTH AND RECORD BOOKED ORDERS FOR Q1 FISCAL 2010
(All dollar amounts are in US dollars)
Highlights from the Quarter:
- 40% increase in Purchase Orders year over year
- 26% increase in Revenue year over year
- 15% increase in Gross Margin year over year
- 49% decrease in Net Income year over year
- Added 105 new customers, up 13% year over year
Woodbridge, Ontario, August 5, 2009 –
RuggedCom Inc. (“RuggedCom”) (TSX:RCM), a leading provider of rugged communications networking solutions designed for mission-critical applications in harsh environments, today announced its financial results for the first quarter of fiscal 2010, ended June 30, 2009.
“We achieved another record quarter for booked orders which is indicative of the strength of our key target markets, however revenues lagged orders mainly due to timing. Gross and net profit margins were impacted by a number of factors including competitive pricing pressure, a weakening US dollar and higher expenditures on research and development.” said Marzio Pozzuoli, President and Chief Executive Officer.
First Quarter Results
Total revenue for the quarter was $16.0 million, representing an increase of 26% from the comparable quarter a year ago. Revenue growth was primarily driven by increased sales in the electric power market, which comprised 65% of the Company’s total revenue, and which grew 24% over the same quarter last year.
The Company booked record customer purchase orders totaling $18.1 million for the quarter, representing an increase of 40% over the same quarter last year.
Gross margin for the quarter was $9.1 million, an increase of 15% over the comparable period last year. On a percentage of revenue basis, first quarter gross margin was 56.7%, a decrease of 5.0 percentage points over a gross margin of 61.7% for the same period last year. The decrease was due to competitive pricing pressure as well as a significant strengthening of the Canadian dollar against the US dollar during Q1-F10, which had a negative effect on margins, as inventory purchased when the Canadian dollar was relatively weaker, was later sold generating US dollar revenue which was translated at rates of exchange reflecting a stronger Canadian dollar. The majority of the Company’s revenues and cost of goods sold are US dollar denominated and therefore gross margins are generally unaffected by movements in the Canadian to US dollar exchange rate. However, during periods of high exchange rate volatility, gross margins are impacted by exchange rate translations.
First quarter net income was $0.9 million, representing the Company’s 17th consecutive quarter of profitability. This represents a decrease of 49% from net income of $1.7 million in the first quarter last year. The decrease was mainly due to a combination of reduced gross margin percentage as described earlier, a significant increase in research and development expenditures and foreign exchange losses. The Company also recorded a provision for income taxes of $0.6 million with an effective tax rate of 38.8%. This compares to $1.0 million income tax expense in the same period last year with an effective tax rate of 36.9%.
First quarter basic earnings per share were $0.07 compared to $0.15 for the same quarter last year while fully diluted earnings per share were $0.07 compared to $0.14 for the same quarter last year.
The Company added 105 new customers in the quarter, an increase of 13% over the same quarter last year.
Conference Call and Webcast
Management will host a conference call at 8:30 a.m. (ET) on Thursday, August 6, 2009. Listeners may attend the conference call by dialing 416-644-3421 or 1-800-732-0232. The live audio webcast can be accessed at RuggedCom’s web site at www.RuggedCom.com. The webcast will also be archived on the site. A taped rebroadcast will be available to listeners following the call until 11:59 PM (ET) on August 13, 2009. To access the rebroadcast, please call 416-640-1917
or 1-877-289-8525 and enter passcode 21310484#.
About RuggedCom Inc.
RuggedCom is a leading provider of rugged communications networking solutions designed for mission-critical applications in harsh environments. RuggedCom's technology solutions include Ethernet switches, network routers, wireless devices, serial servers, media converters, software and professional services. RuggedCom's products are designed for use in harsh environments such as those found in electrical power substations and “Smart Grids”, intelligent transportation systems, industrial process control and military applications.
For further information, please visit www.RuggedCom.com.
The unaudited consolidated interim financial statements and management's discussion and analysis of the results of operations and financial condition for the three month period ended June 30, 2008 and June 30, 2009 can be found under the Company's profile at www.sedar.com. They can also be found in the Investor Relations section of the Company’s website
at www.RuggedCom.com.
Contact Information:
Roy Dalton
Chief Financial Officer
RuggedCom Inc.
Tel: 905-856-5288
Email: Investor@RuggedCom.com